Report: Hampton Roads’ banks discriminate with foreclosed homes

HAMPTON ROADS, Va. (WAVY) — Another fight over foreclosures involves a national report that claims banks don’t maintain or market foreclosed homes in Latino and African-American neighborhoods — including some here in Hampton Roads.

The National Fair Housing Alliance report involved investigators with the Housing Opportunities Made Equal of Virginia (or HOME). The aim of the investigation is this, according to Heather Crislip, HOME’s President and CEO: “to see if properties were being maintained similarly between white neighborhoods and communities of color.”

The organization sent WAVY.com images of tall grass, gutters in need of repair and piled up trash at foreclosed homes in Hampton Roads.

Document: HOME’s presentation on the growing issue (pg. 29, for Hampton Roads)

“Those are called REO’s or Real Estate Owned properties,” Crislip said. “We were hearing lots of complaints from neighborhoods that those properties just weren’t being maintained. So, they lose value. So, you can imagine how that impacts the value of a whole community.”

Crislip calls it a lingering issue of the housing crisis.

Document: Maps of locations investigated in Hampton Roads

“To have a foreclosed home that isn’t secured, that allows anyone to walk into it, the damage that can occur in that home,” she said. “In Hampton Roads, in particular, we found that in communities of color, foreclosed homes were six times more likely not even to be secured or to have broken doors.”

The group has now involved the Department of Housing and Urban Development.

“In Hampton Roads, we identified two banks that had stark disparities in the way they were maintaining properties,” Crislip said. “And we filed two federal actions with HUD against those banks. The first one was Deutsche Bank and US Bank.”

Document: HOME’s press release about Deutsche Bank

It’s Crislip’s hope that the federal agency will now help bring about changes. She expects to hear from HUD early next year.

WAVY.com reached out to both Deutsche Bank and U.S. Bank to get their side of the story. We received the following statements via email.

Deutsche Bank:

Loan servicing companies, and not Deutsche Bank as trustee, are solely responsible for the maintenance, marketing and resale of foreclosed properties. Deutsche Bank as trustee does not select, hire or compensate the loan servicers, nor does it have any role in, or oversight over, the actions the servicers take in connection with foreclosed properties.

Ari Cohen
Press and Media Relations, Americas
Deutsche Bank AG, Filiale New York

U.S. Bank:

U.S. Bank shares NFHA’s concerns about abandoned and neglected properties, and we fully support efforts to maintain the integrity of our communities. U.S. Bank has been fully cooperative with the NFHA since they announced their claims in 2012.

In the NFHA’s initial claim, the vast majority of the properties identified are those where U.S. Bank serves as corporate trustee. This distinction is important because corporate trustees have no legal right to service or maintain properties that are held in an investment pool. Loan servicers have sole control and responsibility with respect to all aspects of managing the loan accounts, including maintaining properties.

When U.S. Bank does own a property, it has a strong and comprehensive process in place to regularly inspect and maintain properties to marketing standards.

Mr. Dana E. Ripley
Senior Vice President, Corporate Communications
U.S. Bank

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