Journey towards housing fairness continues

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When the Center for Responsible Lending examined the demographics of the housing crisis, it determined that for every 100 African-American homeowners with a mortgage, 11 have either lost their homes or were at imminent risk of foreclosure. For Latino families, the figures were even worse—17 of every 100 Latino homeowners with a mortgage are affected by foreclosures. From 2009-2012 African-American and Latino communities will together lose $350 billion due to depreciation in values from nearby foreclosures.

CharleneCrowell

Just as communities of color were targeted for high-cost subprime mortgage loans, now the high concentration of foreclosed properties in these same communities has led to yet another dilemma: a disproportionate share of neglect among bank-owned foreclosures. Also know as real-estate owned properties, these formerly-occupied homes are bringing blight and contributing to further deterioration of the quality of life in communities of color.

A new report from the National Fair Housing Alliance in Washington, D.C., describes an investigation of 624 bank-owned properties in four markets: Dayton, Ohio; Hartford, Conn.; Maryland’s Prince George’s County; and Richmond, Va. Field staff visited and evaluated the exterior condition of REO properties in these markets based on a 100-point scale. The goal was to determine whether banks and their third-party contractors were equitably maintaining the properties owned.

In three of the four metro areas, properties located in either White or stably integrated neighborhoods were managed substantially better than those in communities of color. In the White or integrated communities, REO properties showed evidence of well-maintained lawns, secured entrances and professional sales marketing. By contrast in communities of color, poorly maintained yards, unsecured entrances, poor curb appeal and appearances of abandonment were evident.

The report notes that while Prince George’s County is a “rare example of a racially and ethnically integrated suburb,” its Black neighborhoods, scored well below those of its integrated neighborhoods.

According to NFHA, “A bank risks violating civil rights laws if it owns a home in an African-American or Latino neighborhood and fails to take the same steps to maintain, market, and sell it as it would take for a home in an area with a largely White population.”

The NFHA report also calls for banks, federal regulators, and local governments to take measurable steps to erase the noted disparities.

“It is imperative that banks take affirmative steps to maintain, market, and sell all REO properties according to fair housing best practices standards. It is also imperative that federal regulators and enforcement agencies examine the ways in which banks and the vendors that they hire conduct this business” advised NFHA. “Lastly it is imperative that local municipalities and residents remain vigilant and ensure that the concentration of REO properties is not impeding fair housing choices.”

The irony is that these findings and recommendations are emerging during the nation’s observance of Fair Housing Month. The month-long observance is intended to commemorate the historic signing of the Fair Housing Act on April 11, 1968.

Enacted four years after the 1964 Civil Rights Act, the Fair Housing Act prohibits discrimination by race in housing sales, rentals, and financing and was signed into law by President Lyndon Baines Johnson. Later in 1988, President Ronald Reagan signed into law the Fair Housing Amendments, which prescribed powers for the Department of Justice along with enforcement penalties and expanded protected classes to include disabilities and familial status.

Yet, despite the passage of time and the enactments, fair housing has yet to reach many Americans of color. The laws may have changed; but discriminatory practices still remain in the housing industry.

The journey towards housing fairness continues.

(Charlene Crowell is the Center for Responsible Lending’s communications manager for state policy and outreach. She can be reached at: Charlene.crowell@re­sponsible­lending.org.)

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