Fair Housing Group Goes After Banks Failing to Maintain REO

February 28, 2014
American Banker 
mortgage lending news
The National Fair Housing Alliance has filed administrative complaints with HUD against Bank of America, U.S. Bancorp, and Deutsche Bank over the upkeep of foreclosed properties in minority communities.

In the most recent complaint against Deutsche Bank, NFHA and several other fair housing groups across the country claim that REO properties in white neighborhoods are being kept up in a "strikingly better manner." "You have three banks with hundreds of REO that they are not maintaining and they are just pulling down property values in those neighborhoods," according to Shanna Smith, president and chief executive of NFHA. Vacant homes that are left in limbo and cannot be sold because of the drawn-out nature of the foreclosure process have created the problem, note industry attorneys.

The administrative complaint could lead banks to agree to a settlement to address the issue; or HUD could take administrative action, file a lawsuit, or dismiss the grievance. The group plans to file six more complaints against lenders and servers over the next six months.

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