Alliance found that properties in predominantly black and Latino neighborhoods were far more likely than those in predominantly white areas to be left in disrepair. In addition, foreclosed properties in minority neighborhoods were routinely less likely to have for-sale signs than those in white communities.
Banks and lenders have maintained and marketed foreclosed properties far better in white neighborhoods than in minority neighborhoods, according to a report released Wednesday by the National Fair Housing Alliance.
Investigators for the group evaluated more than 1,000 foreclosed properties in nine metro areas around the country: Atlanta; Baltimore; Dallas; Dayton, Ohio; Miami-Fort Lauderdale; Oakland, Calif.; Philadelphia; Phoenix; and Washington.
They found properties in predominantly black and Latino neighborhoods were far more likely than those in predominantly white areas to be left in disrepair, with maintenance problems such as broken or boarded-up windows, unkempt yards, water damage and unsecured entrances. In addition, foreclosed properties in minority neighborhoods were routinely less likely to have for-sale signs than those in white communities.
Poor upkeep of “real estate-owned,” or REO, properties can have a detrimental effect on the surrounding community, forcing down property values, attracting crime and vagrancy and presenting potential health hazards, alliance officials said. In addition, unsightly foreclosures are harder for banks to sell and often mean properties linger on the market longer than they might have otherwise.
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“The inferior way in which banks maintain and market their REO properties in communities of color actually changes the character of and serves to degrade the quality of life in these neighborhoods,” said the report by the alliance, a consortium of groups from across the country dedicated to eliminating housing discrimination.
The problem of vacant, abandoned and uncared-for foreclosures has plagued virtually every community in the country in the wake of the housing crisis. Cities and counties have tried with mixed results to force banks and delinquent homeowners to better maintain properties.
Cash-strapped municipalities have tapped their shrinking budgets to care for crumbling homes. Some localities have taken to demolishing some long-vacant homes altogether.
At the same time, minority communities have been hit particularly hard by foreclosures, in part because of the higher proportion of subprime loans in those communities. That makes it even more important that foreclosed homes in those neighborhoods be maintained properly, said alliance President Shanna Smith.
“We want these neighborhoods to be treated fairly,” she said. “Banks are supposed to be taking care of these assets.”
The investigation, which took place between last May and this February