As one of the hardest-hit states from the housing crises, Ohio has seen several communities disproportionately blighted by vacant homes owned by financial institutions. While banks are often required to ensure that these properties meet the minimum guidelines from city and county health departments, this has not prevented certain neighborhoods from being disproportionately affected by foreclosures and blight.
An alarming report and subsequent compliant filed by the National Fair Housing Alliance (“NFHA”) alleges that Bank of America utilized different standards when it came to maintaining foreclosed properties in white communities than communities comprised of other races and ethnicities. While the NFHA did not assign a particular motive to Bank of America, these practices may give rise to claims under the Fair Housing Act.
In alleging their complaint, the NFHA conducted a study examining several categories concerning the curb appeal, structure, painting, and water damage of the vacant properties in white and minority communities. The NFHA categorized each negative factor as a deficiency on the property. For example, in Dayton, Ohio, the NFHA alleges that their study indicated that REOs in African-American communities were 1.8 times as likely as REOs in White communities to have 10 or more deficiencies. Likewise, African American communities in Dayton were 1.5 times as likely to have overgrown grass and dead shrubbery and 2 times as likely to have broken mailboxes.
While the facts in this complaint have not been verified or proven at an adjudicatory hearing , they paint a troubling picture concerning the efforts being made to improve the communities hardest hit by the collapse of the housing market. Previously, Wells Fargo Bank, NA entered into a settlement with the NFHA concerning similar allegations in an amount in excess of $38.5 million. Regardless of the outcome of this action, issues concerning the status of foreclosed properties in minority communities persist and have not been sufficiently dealt with by either their municipalities or the financial institutions.
http://www.nationalfairhousing.org/Portals/33/amendcomplaint4.pdf