Registry can help ID those responsible for foreclosures

We know from numerous reports that the housing crisis hit minority families pretty hard. Minority homebuyers by the tens of thousands were trapped in predatory mortgage loans and, as a result, their communities disproportionately felt the impact of foreclosures.

Now fair housing organizations have filed discrimination complaints with the U.S. Department of Housing and Urban Development alleging discrimination in the marketing and maintenance of foreclosed properties in minority neighborhoods in nine major cities. The banks targeted by the National Fair Housing Alliance and four of its member organizations are U.S. Bank and its parent company, U.S. Bancorp, and Wells Fargo Co.

The complaints were the result of an investigation in which the housing groups said foreclosed properties in predominantly white areas were much better maintained than properties in predominantly African-american or Latino neighborhoods.

The groups examined more than 1,000 properties in Georgia, Maryland, Texas, Ohio, Florida, California, Pennsylvania, Arizona and Washington, D.C.

U.S. Bancorp and Wells Fargo have denied discrimination and have questioned whether the properties that got failing marks were even their responsibility to maintain.

“In the vast majority of cases where U.S. Bank is involved in a foreclosure, we serve as a trustee for an investment pool where the former mortgage was held, and have no role in servicing or maintaining the property,” Nicole GarrisonSprenger, vice president of corporate public relations, said in a statement. “When we do own a property, we have a strong and comprehensive process in place to regularly inspect and maintain properties to marketing standards where we have legal access, regardless of their location.”

Wells Fargo said in a statement that the bank “conducts all lending- and servicing-related activities in a fair and consistent manner without regard to race, and this includes maintenance and marketing standards for all foreclosed properties for which we are responsible. Regrettably, the complaint does not include specific property information that can allow us to investigate the circumstances in any of the markets they list.”

The properties examined by the housing groups were evaluated on a 100-point scale. Points were subtracted for routine maintenance issues that included broken windows and doors, unshoveled snow, overgrown lawns and trash on the property.

While properties in predominantly white neighborhoods “were more likely to have neatly manicured lawns, securely locked doors and attractive ‘for sale’ signs out front, homes in com- munities of color were more likely to have overgrown yards littered with trash, unsecured doors, broken windows, and indications of marketing as a distressed sale,” the report said.

The report noted that properties in communities of color were 42 percent more likely to have more than a dozen maintenance problems when compared to properties in predominantly white neighborhoods. In many cases, the report added, the deterioration occurred while properties were under bank ownership and could be attributed to lender neglect.

Following the advice of a foreclosure task force, the Legislature passed a bill that requires the creation of an Internetbased registry that will help communities identify who is responsible for foreclosed properties. Within 30 days after a foreclosure sale of a residential property, the purchaser has to submit information to the registry, including the name, telephone number and street address of the person who is responsible for the maintenance of the property.

A registry can go a long way to help communities and government officials locate the parties responsible for the condition of foreclosed properties.