Fair housing organizations file discrimination complaint against Wells Fargo
MVFHC and NFHA allege discrimination in marketing and maintenance of foreclosed properties
April 10, 2012 — The Miami Valley Fair Housing Center (MVFHC) and its partners, the National Fair Housing Alliance (NFHA) and three other NFHA member agencies, announced a federal housing discrimination complaint against Wells Fargo & Co. and Wells Fargo Bank, N.A. The complaint, filed earlier today with the U.S. Department of Housing and Urban Development, is the result of an undercover investigation of Wells Fargo’s bank-owned properties finding that foreclosed properties in white areas are much better maintained and marketed by Wells Fargo than such properties in African-American and Latino neighborhoods.
The investigation of 218 foreclosed properties owned by Wells Fargo demonstrates that Wells Fargo has engaged in a systemic practice of maintaining and marketing its foreclosed, bank-owned properties (also known as Real Estate Owned or REO) in a state of disrepair in communities of color while maintaining and marketing REO properties in predominantly white communities in a far superior manner. The Wells Fargo investigation evaluated properties in greater Dayton as well as in the metropolitan areas of Atlanta, GA; Baltimore, MD; Dallas, TX; Miami and Fort Lauderdale, FL; Oakland/Richmond/Concord, CA; Philadelphia, PA; Phoenix, AZ; and Washington, DC.
Nationally, and in each of the eight metropolitan areas, Wells Fargo’s REO properties in communities of color were far more likely to have several deficiencies in maintenance or marketing than REO properties in predominantly white communities.
Without a “for sale” sign, for example, potential homebuyers would simply not know a property is available. Also, if there is storm damage or unauthorized occupants, neighbors have no one to call. With a “for sale” sign, neighbors can call a real estate agent to report these kinds of problems.
There were no “for sale” signs at 90 percent of Wells Fargo properties in Dayton’s communities of color. Almost twice as many “for sale” signs were found in white communities than in communities of color in Philadelphia, PA and Oakland, CA. In Washington, DC, there were four times as many “for sale” signs in white neighborhoods than in neighborhoods of color.
Trash on the property is a health and safety hazard and makes a home unappealing—but this is a very easy problem to fix and should be addressed immediately. Wells Fargo properties in communities of color in Atlanta, Philadelphia, Oakland, Miami, Dallas, and Washington, DC had almost twice as much trash as those in white communities.
Detailed national and local statistics and photos are available in this PowerPoint presentation (PDF format).
“Wells Fargo’s disregard for homes in communities of color has severely damaged these communities,” said Shanna L. Smith, NFHA’s President and CEO. “The Company has also hindered the nation’s efforts to promote fair housing and is clear violation of the Fair Housign Act.”
MVFHC, NFHA and three other NFHA member agencies—Housing Opportunities Project for Excellence in Miami, FL; Metro Fair Housing Services in Atlanta, GA; and North Texas Fair Housing Center in Dallas, TX—evaluated the maintenance and marketing of REO properties for the existence of 39 different types of maintenance or marketing deficiencies, such as broken windows and doors, water damage, overgrown lawns, lack of “for sale” signs, trash on the properties, and other deficits.
“We hope that Wells Fargo will take immediate action to correct the stark racial and ethnic disparities we have found in the maintenance and marketing of its foreclosed properties,” continued Smith.
The complainants are represented by Peter Romer-Friedman, an attorney at Cohen Milstein Sellers & Toll PLLC, a law firm that specializes in class action and other complex litigation on behalf of plaintiffs.
Next week, MVFHC, NFHA and their partners will announce another complaint they will file against another major bank.