Beware of the Bank Next Door

Despite signs that our nation’s economy is improving, the real boost for Florida and our nation won’t happen until the housing market recovers.

Fixing housing will mean holding many of the nation’s largest lenders accountable for their misdeeds.  A top culprit is Bank of America, responsible for a sea of poorly maintained foreclosed homes that blight communities across Florida and the nation.

After the Big Banks flooded all communities, but particularly communities of color, with toxic loans, many families lost their homes to foreclosure.  Now the banks are again discriminating against these communities by abandoning the very same properties, which they are responsible for maintaining. 

The evidence of Bank of America’s discrimination can be found in communities of color in Orlando, Miami, and Fort Lauderdale where Bank of America’s foreclosed homes in African-American or Latino neighborhoods are much more likely to be uncared for and forgotten.  These foreclosed properties are often referred to as Real Estate Owned (REO) properties.

A recent investigation in Miami, Fort Lauderdale, and Orlando by Housing Opportunities Project for Excellence (HOPE), Inc., and the Fair Housing Continuum, Inc., found that Bank of America does a much better job of maintaining and marketing its foreclosed homes in white areas than in communities of color.

HOPE Inc. examined foreclosed homes in white, African-American, Latino and majority non-white areas in Miami and Fort Lauderdale.  About 57 percent of the homes in communities of color in the two cities were littered with substantial amounts of trash, while only 36 percent of Bank of America-owned homes in white areas encountered this problem.  About 43 percent of the Bank of America foreclosed properties in communities of color in the two cities had damaged windows.

In Orlando, the Fair Housing Continuum investigated Bank of America properties and found that 56 percent of those in African-American neighborhoods had substantial amounts of trash.  None of the homes in white areas had that problem. 

In African-American neighborhoods, Bank of America’s foreclosed properties in Orlando were twice as likely to have broken doors or locks and three times more likely not to have a “for sale” sign.  Broken doors or locks are an invitation to vagrants while the lack of a “for sale” sign leads one to seriously wonder if the bank has any interest in returning these homes to owner occupancy.

These problems become personal if you live next door to one of these homes.  A lawn littered with trash becomes an eyesore for the neighborhood, makes a home unappealing to visitors and can be a potential health and safety hazard. 

Broken windows make a property look neglected and, even worse, in our hot climate they promote the growth of mold in a home, requiring expensive repair before it can be sold.  The longer a property sits vacant, the greater the chance of depreciation to the home next door, across the street and down the block.

The findings in Orlando, Miami and Fort Lauderdale are part of a larger investigation of 392 properties in 10 cities around the nation led by the National Fair Housing Alliance (NFHA).  They were documented in a federal housing discrimination complaint filed by NFHA, the Fair Housing Continuum, HOPE Inc. and four other NFHA member organizations with the U.S. Department of Housing and Urban Development on Oct. 10. 

The investigation into maintenance and marketing of foreclosed properties by our nation’s lenders is an ongoing investigation that will likely include additional federal housing discrimination complaints.  NFHA filed similar complaints against Wells Fargo and US Bancorp earlier this year.

When Bank of America abandons the homes it owns or services, our communities struggle. Florida’s municipalities are deprived of valuable tax revenue to fund schools, police, libraries and other services.  Neighbors, who must often take care of the abandoned homes themselves, find that their property values go down.  Any plans they may have to use the equity in their homes to pay for their children’s college education, to start a business or to weather financial uncertainty are threatened.

Bank of America should mend its ways and be a good neighbor in all communities by taking proper care of all of its foreclosed homes and taking active steps to put them in the hands of new homeowners.  The National Fair Housing Alliance and its member agencies have documented real strategies for improvement in the report, The Banks Are Back – Our Neighborhoods Are Not: Discrimination in the Maintenance and Marketing of REO Properties.

It is high time for Bank of America to adopt those strategies and help our communities recover from the housing crisis.

David Baade is President and CEO of the Fair Housing Continuum, Inc. serving Brevard, Indian River, Seminole, Osceola, Orange and Volusia Counties and Keenya Robertson is President and CEO of Housing Opportunities Project for Excellence, Inc. serving Miami-Dade and Broward Counties.