WASHINGTON, DC — Today, the National Fair Housing Alliance (NFHA) and three of its member organizations announced that they have filed a federal housing discrimination complaint with the U.S. Department of Housing and Urban Development against Deutsche Bank.
The civil rights organizations allege that Deutsche Bank maintains and markets foreclosed homes in majority white neighborhoods in a strikingly better manner than it does in majority African-American and Latino neighborhoods. Failing to maintain and market homes based on the racial or ethnic composition of the neighborhood violates the federal Fair Housing Act.
The metropolitan areas named in the complaint are: Chicago, Ill.; Memphis, Tenn.; and Washington, D.C., including Prince George's and Montgomery Counties, MD. The three member organizations that conducted investigations with NFHA are the South Suburban Housing Center ( Homewood, IL ), Open Communities ( Winnetka, IL ), and HOPE Fair Housing Center ( West Chicago, IL ).
The fair housing organizations investigated the maintenance and marketing of REO properties for 39 different types of maintenance deficiencies, including broken windows and doors, overgrown lawns and shrubs, trash on the property, mold, water damage and other problems that could cause health and safety issues for the neighbors and community at large if not taken care of properly.
In June 2013, Deutsche Bank settled a lawsuit with the City of Los Angeles, which accused the bank of allowing hundreds of foreclosed properties to turn into slum conditions, leading to the destabilization of communities.
"Deutsche Bank settled a lawsuit with the City of Los Angeles because it failed to maintain its REO properties. That $10 million settlement should have inspired Deutsche to change its business model and increase quality control measures," said Shanna L. Smith, President and CEO of the National Fair Housing Alliance. "However, this initial investigation, including foreclosed homes within range of the nation's Capitol, clearly demonstrates the opposite. It is simply bad business not to mow lawns, remove trash or perform routine maintenance in order to preserve the home and get top dollar at sale."
Trash on a property is not only an eyesore for neighbors, but it makes a home unappealing to buyers and is a potential health and safety hazard. Trash attracts rats, mice, and stray animals and signals to vandals the home is vacant and neglected. Regular maintenance and a good quality control process would correct trash problems, but in Memphis, 69 percent of Deutsche Bank REOs in communities of color had substantial amounts of trash. In Chicago, 55 percent of REO properties in communities of color had substantial amounts of trash. In the Washington, DC suburb of Prince George's County, MD, NFHA identified 52 percent of the Deutsche Bank REOs as having substantial trash on the properties.
"Deutsche Bank is causing harm to Chicago homeowners, schools and local governments by neglecting to provide basic maintenance to these homes," said John Petruszak, Executive Director of the South Suburban Housing Center. "The bank's failure to maintain its properties listed for sale brings down property values and reduces tax revenue for schools and city services. Homeowners have lost the opportunity to refinance at historic low levels because of the damage to property values."
Having secured doors and windows on a vacant home is essential for community safety and preservation of the REO. In Chicago, 27 percent of properties in communities of color had broken doors or locks and 40 percent of properties in communities of color had damaged windows. In Washington, D.C., 22 percent of properties in communities of color had broken doors and 35 percent of properties in communities of color had unsecured windows.
"Deutsche Bank needs to ensure they are protecting children and the safety of the community," said Anne Houghtaling, Executive Director of HOPE Fair Housing Center. "By not properly securing doors and not fixing broken windows, Deutsche Bank encourages vandalism. Just one home damaged by fire and left in disrepair can cause health issues for neighbors and blight in the neighborhood."
One property in a predominately non-white community in the suburbs of Chicago had trash, boarded and unsecured windows, damaged fence, peeling paint, and damaged siding. "Deutsche Bank must be held responsible for maintaining and marketing its properties," said Gail Schechter, Executive Director of Open Communities. "No one at Deutsche Bank would want to live next door to one of these poorly maintained REOs. So why should African-American and Latino homeowners have to suffer economic harm and threats to their health and safety?"
Another property in a predominately African-American neighborhood in Memphis was listed "for sale" and had trash in the yard, broken windows and doors, a severely damaged fence and piles of wood and debris scattered over the front yard and the public sidewalk. "This house and yard are disgusting. Not only is it a safety hazard for anyone walking down the street, it attracts rodents and has an immediate impact on the quality of life for the neighbors," continued Smith.
NFHA and its member agencies are represented by Stephen Dane, Jean Zachariasiewicz, and Anne Bellows of Relman, Dane & Colfax PLLC located in Washington, DC.
Additional detailed statistics and photos are available at www.nationalfairhousing.org .
NFHA has filed similar complaints against Bank of America and US Bank. Many of the neighborhoods investigated overlap. Added together, the blight and damage caused to these communities by the banks is compounded. Health and safety factors increase because of accumulated trash and overgrown lawns attracting rodents and insects and broken windows and doors inviting vandalism. Deutsche Bank paid $10 million to the City of Los Angeles and still fails to maintain its REOs in other cities across America.
The Fair Housing Act makes it illegal to discriminate based on race, color, national origin, religion, sex, disability or familial status, as well as the race or national origin of residents of a neighborhood. This law applies to housing and housing-related activities, which include the maintenance, appraisal, listing, marketing and selling of homes.
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CHICAGO, IL
73 percent of Deutsche Bank-owned homes in Chicago communities of color had more than five maintenance or marketing problems.
MEMPHIS, TN
88 percent of Deutsche Bank-owned homes in Memphis communities of color had more than five maintenance or marketing deficiencies, and 25 percent had more than 10 maintenance or marketing deficiencies.
WASHINGTON, DC
91 percent of Deutsche Bank-owned homes in Washington, D.C. communities of color had more than five maintenance or marketing deficiencies.
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The National Fair Housing Alliance
Founded in 1988, the National Fair Housing Alliance is a consortium of more than 220 private, non-profit fair housing organizations, state and local civil rights agencies, and individuals from throughout the United States. Headquartered in Washington, D.C., the National Fair Housing Alliance, through comprehensive education, advocacy and enforcement programs, provides equal access to apartments, houses, mortgage loans and insurance policies for all residents in the nation.
HOPE Fair Housing Center
HOPE, established in 1968, is the oldest fair housing center in Illinois. HOPE Fair Housing
Center seeks to end the hurt and devastation of housing discrimination and segregation because of race, color, religion, national origin, sex, disability, familial status, or any other characteristics protected under state or local laws.
Open Communities
Open Communities is proud of its grassroots history as an integral part of Chicago's Civil Rights Movement of the 1960s. Open Communities works with current and prospective residents and local groups to promote economically and culturally diverse communities in north suburban Chicago.
South Suburban Housing Center
Initially organized in April of 1975 by local chapters of the League of Women Voters, the mission of the South Suburban Housing Center ( SSHC ) is the promotion and fostering of long-term diversity throughout all communities in its service area by working to eliminate all forms of discrimination and exploitation in the housing market, including predatory mortgage lending.
The work that provided the basis for this publication was supported, in part, by funding under a grant with the U.S. Department of Housing and Urban Development. The substance and findings of the work are dedicated to the public. The author and publisher are solely responsible for the accuracy of the statements and interpretations contained in this publication. Such interpretations do not necessarily reflect the views of the Federal Government.
