Milwaukee, other metro areas settle with Fannie Mae for $53M
The Metropolitan Milwaukee Fair Housing Council and 18 other fair housing organizations nationwide reached a $53 million settlement with Fannie Mae over the agency’s racially discriminatory maintenance and marketing practices.
The lawsuit alleged in Milwaukee and 38 other metropolitan areas, the institution disproportionately failed to properly maintain and market foreclosed homes in predominately Black and Latino communities between July 2011 and October 2015.
How much of the settlement Milwaukee’s fair housing council will receive has not yet been disclosed. However, it comes on top of other funds the agency has been allotted to make its fair housing enforcement more robust.
As Lisa Rice, president and CEO of the National Fair Housing Alliance, pointed out in a statement that Black, Latino and poor neighborhoods were hit hardest by the 2008 housing crisis. Residents of those communities were more likely to receive subprime mortgages and consequently, more likely to go through a foreclosure, she said. The alliance represented metro areas without fair housing councils.
The 2,300 properties investigated in the lawsuit were foreclosures owned by Fannie Mae called “real estate owned” or REO properties.
Throughout the investigation, 49,000 photographs documented stark racial disparities in maintenance and marketing deficiencies, which looked at 35 factors, such as broken doors and windows, damaged siding and garbage.
“By failing to maintain REO dwellings in communities of color according to the same standards as it maintains REO dwellings in predominantly white neighborhoods, Fannie Mae stigmatizes communities of color as less desirable than predominantly white neighborhoods,” the complaint read.
Among the 330 properties in Milwaukee that were analyzed:
● Roughly 60% of REO properties in communities of color had five or more maintenance deficiencies or problems, compared to one-third of REO properties in predominantly white neighborhoods.
● More than a quarter (26.9%) of REO properties in communities of color were littered with trash compared to 6.6% of REO properties in predominantly white neighborhoods.
● Nearly half (47.2%) of REO properties in communities of color had broken or boarded windows compared to only 19.9% of REO properties in predominantly white neighborhoods.
● Nearly one in three (31.6%) REO properties in communities of color had damaged siding compared to 15.4% of REO properties in predominantly white neighborhoods.
“It’s disappointing to know that after all of this time, the people who are gatekeepers, provide housing, provide mortgage lending are still involved in these types of practices that — based on race — give people different access and a different quality of life,” said Bill Tisdale, president/CEO of Milwaukee’s fair housing council.
In a statement, the housing alliance said Fannie Mae has “implemented practices that will help prevent harmful treatment of communities of color in the future” with increased oversight and more focus on owner-occupants rather than those purchasing REOs.