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Foreclosed Homes in Minority Neighborhoods More Prone to House Decay

foreclosed-homes-for-minorities

Foreclosed Homes in Minority Neighborhoods More Prone to House Decay

Fair-housing Advocates Find a Racial Divide In Home Maintenance Provided By Fannie ae

 
A recent federal district court lawsuit filed by nonprofit housing advocacy groups alleges that government-sponsored Fannie Mae (The Federal National Mortgage Association) allowed more houses in non-white neighborhoods to deteriorate. These groups, which were led by the National Fair Housing Alliance, studied 2,300 foreclosed homes around the country based on parameters similar to those employed by Fannie Mae. Broken gutters to missing mailboxes, unmowed lawns, broken windows, damaged fences, rotten wood and peeling paint – these were all distinctive problems found in foreclosed homes in minority neighborhoods as contrasted to those in middle-class White neighborhoods that were tended to and ready for sale. For instance, the advocacy workers found that foreclosed homes in predominantly minority neighborhoods were six times more likely to have holes in their walls. The lawsuit also alleges that these homes were allowed to fall into disrepair well after the 2007 housing crisis brought on by the predatory lending that caused many families to lose their homes.

 

A Sluggish Road to Recovery for Minority Neighborhoods

The resultant depressed value of adjacent property and its adverse impact on the local housing mean that the burden of these blindsided properties falls squarely on the shoulders of the existing residents in these minority neighborhoods. The slower rate of recovery of the housing market is making it much harder for these residents to build equity.

The lawsuit was filed post a yearlong investigation by the advocacy groups, during which they examined properties in 38 metropolitan areas. In addition to signs of decay and neglect, the groups also checked for unsecured doors and ‘For Sale’ signs indicating that brokers were actively trying to sell these homes. The groups have submitted photographic evidence comprising nearly 50,000 images to substantiate their claims. The surveyed homes range from Midwestern bungalows to California McMansions. The group found that almost a third of foreclosed homes in minority neighborhoods had ten or more problems as opposed to seven percent of properties in White-majority areas. Minority neighborhoods also faced several issues in addition to those on the group’s checklist including unsecured doors, boarded-up windows and overgrown shrubbery.

graph-home-maintenance-issues-white-minorities

 

The View From The Other Side

Fannie Mae has refuted these allegations, emphasizing that its maintenance standards ensure that all properties are tended to and treated equally, and routes this maintenance work through local maintenance contractors. In their statement, Fannie Mae has claimed that its recent nation-wide policy requires contractors to use a glass-like material for broken doors and windows, thereby minimizing the most prominent sign of decay. It also said that every property under its purview receives the same level of maintenance, regardless of the condition in which the property is received.

 

A Clear Bias?

The results of the investigation carried out by the participating groups indicate that the variances in maintenance are not rooted in the performance of individual contractors but rather the institution of Fannie Mae as a whole. The lawsuit points to a regression analysis that indicates that only a third of the disparities between the maintenance provided to foreclosed homes in minority and White neighborhoods can be attributed to other potential influencing factors, such as differences in local crime levels, property values, sales dates and other non-racial factors. The only consistent metric, however, is race.

For more information about the lawsuit over neglected foreclosures >

Peter Spino

Peter Spino

Peter Spino, Jr., Esq., is an attorney that has a general law practice but specializes in residential and commercial real estate. His business and real estate experience make him uniquely qualified to represent you in any legal matter you may be faced with. Over the past five years Peter Spino, Jr., Esq., has assisted over a thousand homeowners with loan modifications, foreclosure defense, short sales, deeds in lieu, settlement of second mortgages and bankruptcy.

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