U.S. Bank may be discriminating when it comes to upkeep and sale of the foreclosed properties it owns in Memphis' minority neighborhoods, according to the National Fair Housing Alliance (NFHA).
The NFHA released a report this month alleging that U.S. Bank is failing to maintain and market properties in the city's African-American and Latino neighborhoods. The report states that bank-owned properties in predominantly white communities receive significantly better treatment.
The allegation potentially places U.S. Bank in violation of the Fair Housing Act, which prohibits discrimination in the sale, rental, and financing of housing based on race, color, national origin, religion, or sex.
Shanna Smith, president of NFHA, said U.S. Bank's failure to maintain its properties in minority neighborhoods affects residents who live near the unmaintained homes.
"Every day these properties are not taken care of, the whole neighborhood is hurt," Smith said. "Their property values are going down. The neighbors may have problems with rats or flea infestation, vagrants, or vandals, or teenagers may hang out at the vacant house. This foreclosure problem with [U.S. Bank] not taking care of the houses has a more serious impact than other types of discrimination."
NFHA initially filed a complaint with the U.S. Department of Housing and Urban Development (HUD) against U.S. Bank in 2012, accusing the bank of having a better focus on maintenance and marketing of foreclosed homes in white neighborhoods than in African-American and Latino neighborhoods.
NFHA amended its federal housing complaint this month, alleging that it discovered new information in various cities, including Memphis, regarding the issue. Twenty-one U.S. Bank-controlled, for-sale properties in Memphis — 11 in African-American neighborhoods, four in majority non-white neighborhoods (where fewer than 50 percent of residents are white), and six in predominantly white neighborhoods — were investigated by NFHA. Those properties are in Whitehaven, Frayser, Hickory Hill, Bartlett, and Germantown, among other areas.
NFHA said it discovered that 67 percent of the U.S. Bank properties in communities of color had 10 or more deficiencies, such as overgrown grass, trash, broken windows, and an absence of for-sale signs, while not a single property in a predominantly white area had 10 or more deficiencies.
U.S. Bank spokeswoman Nicole Garrison-Sprenger said the company hasn't received the new information disclosed by NFHA but takes the organization's concerns about abandoned and neglected properties seriously. She said NFHA's 2012 report is the last one that U.S. Bank is familiar with.
"NFHA's claims against U.S. Bank have been inaccurate," Garrison-Sprenger said. "U.S. Bank is one of the nation's leading corporate trustees, which means we have no legal right to service or maintain properties that are held in an investment pool for which we are trustee. The vast majority of the properties originally identified by NFHA are properties where we are trustee. We have no legal ability to service or maintain these properties. When we do own a property, we have a strong and comprehensive process in place to regularly inspect and maintain properties to marketing standards, regardless of their location."
NFHA contends that the Fair Housing Act includes trustees within the class of defendants who can be liable for fair housing violations.
Other cities identified in NFHA's amended complaint include Baton Rouge, Indianapolis, Milwaukee, Baltimore, and Chicago.
In September, NFHA accused Bank of America of violating the Fair Housing Act by better maintaining homes in predominantly white neighborhoods compared to predominantly minority neighborhoods. The report focused on 12 properties — five in predominantly black neighborhoods and seven in predominantly white neighborhoods.