Local Fair Housing Center and Other Fair Housing Groups Reach Historic Settlement with Fannie Mae Focused on Rebuilding Communities of Color
The settlement will directly and immediately benefit the communities of color throughout the Miami Valley region and nationwide hit hardest by the foreclosure crisis and its aftermath.
February 7, 2022 — Today, The Miami Valley Fair Housing Center (MVFHC), along with the National Fair Housing Alliance (NFHA) and 19 other local fair housing organizations throughout the country, reached a landmark $53 million agreement with Fannie Mae (formally known as the Federal National Mortgage Association) to resolve a case arising from allegations that Fannie Mae treated foreclosed homes in communities of color unfavorably. The settlement will help rebuild and strengthen communities of color in 39 metropolitan areas including the Miami Valley. In the case, MVFHC and the other plaintiffs alleged that Fannie Mae maintained and marketed its foreclosed homes in predominantly White neighborhoods while allowing similar homes in communities of color to fall into disrepair and this differential treatment exacerbated the damage caused by the 2008 mortgage crisis and impeded recovery from the crisis in neighborhoods of color. The case was the first time a federal court confirmed the nation’s fair housing laws cover the maintenance and marketing of Real Estate Owned (REO) properties.
“Fourteen years after the housing crash of 2008, and the predatory mortgage lending that preceded it, the Miami Valley Fair Housing Center continues to challenge issues that negatively impacted our neighborhoods,” said Ron Jackson, Chair of the Board of Directors of the Miami Valley Fair Housing Center.
The plaintiffs’ 2016 allegations against Fannie Mae arose after a comprehensive, four-year investigation of more than 2,300 Fannie Mae-owned foreclosed properties in 39 metropolitan areas in the country. Of those properties, 90 were located in the Miami Valley. The plaintiffs collected more than 49,000 photographs revealing poorly maintained properties in Black and Latino communities, particularly as compared to properties in predominantly White neighborhoods.
”We will make strategic reinvestments into the communities of color that are hardest hit, with the goal that those investments begin stabilizing neighborhoods,” said Jim McCarthy, MVFHC’s President/CEO.
Today’s agreement has far-reaching implications. MVFHC and the other plaintiffs will invest the vast majority of the settlement monies directly back into the communities they allege were harmed by Fannie Mae’s conduct. Specifically, plaintiff organizations will use over $35 million of the settlement to promote home ownership, neighborhood stabilization, access to credit, property rehabilitation, and residential development in the 39 metropolitan areas at issue in the case, including Dayton. The plaintiffs will manage and disburse the settlement funds, providing much-needed grants, including for down-payment assistance for first-generation homebuyers and renovations for homes that languished in foreclosure. The grants will also include innovative programs and partnerships to promote fair housing.
Fannie Mae implemented practices that will help avoid similar harmful treatment of communities of color in the future, including increasing its oversight of maintenance of properties it owns, prioritizing owner-occupants rather than investors as purchasers of REOs, and ensuring that it complies with fair housing laws, including by providing fair housing training to its employees and vendors.
MVFHC and the other fair housing groups are represented by noted civil rights law firms Relman Colfax PLLC and Dane Law LLC. The organizations were also represented by Morgan Williams, NFHA’s General Counsel, and Julia Howard-Gibbon, Supervising Attorney of Fair Housing Advocates of Northern California.
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