Thursday, December 15, 2016

Alleged Racial Disparities in the Continuing Foreclosure Crisis

According to a recent article in The New York Times, fair housing advocates allege that there are racial disparities in the way that Fannie Mae cares for houses in foreclosure. While the nation largely has bounced back from the foreclosure crisis, thousands of properties remain in various stages of foreclosure across the country and many of them are in states of disrepair that are likely to prevent them from being sold. What is the specific allegation against Fannie Mae? As the article articulates, a number of organizations, “led by the National Fair Housing Alliance, say that Fannie Mae has systematically failed to care for houses in foreclosure in minority neighborhoods while ensuring those in working- and middle-class white communities were tended and ready for sale.”
These allegations appeared in a recent lawsuit, which refers primarily to actions (or inactions, in this case) taken by Fannie Mae “well after the predatory lending that forced many families out of their homes.” What else should you know about these allegations and how they may impact foreclosures in Illinois and throughout the country?
Disparities Alleged in Vacant Homes
As the article explains, a group of fair-housing advocates have begun visiting foreclosed properties across the country, from Oakland, California to Dayton, Ohio. What have they found? Thus far, of the more than 2,300 properties those advocates saw between the years of 2011 and 2015, the houses in largely minority neighborhoods are in varying states of deterioration. When certain houses goes into foreclose, Fannie Mae is responsible for properly maintaining them. What criteria did the fair-housing advocates use in assessing the homes they visited? They relied upon Fannie Mae’s own maintenance checklist, which includes items such as:
  • Broken gutters;
  • Missing mailboxes; and
  • Unmowed lawns.
Other items noted when visited foreclosures in minority neighborhoods included some of the following:
  • Peeling paint;
  • Rotting wood;
  • Missing or broken shutters;
  • Broken stairs;
  • Broken windows;
  • Damaged front/back doors;
  • Damaged siding;
  • Exterior holes; and
  • Damaged fencing.
What conclusion have fair-housing advocates drawn? By placing data on a graph, the National Fair Housing Alliance Census demonstrated that, of the properties most likely to have a high number of deficiencies, 75% were nonwhite. For instance, the data showed that “foreclosed homes in predominantly minority neighborhoods are six times more likely to have holes in the wall,” while foreclosed properties in those same neighborhoods are “two times more likely to have broken mailboxes” and “five times more likely to have broken windows.”
How the Housing Advocates Obtained Their Data
As we mentioned, the fair-housing advocates who have made allegations against Fannie Mae visited more than 2,300 foreclosed properties between 2011 and 2015. But how did they decide where to go? As the article explains, investigators visited 38 different metropolitan areas across the country. They conducted research into specific zip codes “in both minority and predominantly white work- and middle-class communities with a high number of foreclosures.” Investigators visited a wide range of properties within those groups, and then “assessed basic maintenance items,” including many of the items mentioned above.
In total, more than 30% of foreclosed properties in predominantly minority neighborhoods had 10 or more maintenance issues, compared with only 7% of properties in primarily white neighborhoods.
Foreclosure remains a serious issue in our country, as well as a problem for many individual homeowners in Illinois. If you have questions about avoiding foreclosure, an experienced Oak Park foreclosure defense lawyer can help. Contact the Emerson Law Firm today.
See Related Blog Posts:
Condominiums and Foreclosure in Chicago