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» NFHA ACCUSES BIG BANKS OF REO NEGLECT The National Fair Housing Alliance (NFHA) recently held two separate press events to announce that the organization filed new complaints with HUD accusing Bank of America (BofA) and U.S. Bank of ongoing neglect of REO properties in minority neighborhoods, which NFHA says is in violation of the federal Fair Housing Act. NFHA added five new cities to its BofA complaint—Memphis, Denver, Las Vegas, Tucson, and Philadelphia—bringing the total to 18 metropolitan areas where the advocacy group claims Bank of America is discriminatorily maintaining repossessed homes. New metropolitan areas were also added to NFHA's complaint against U.S. Bank, including: Baton Rouge, Louisiana; Indianapolis, Indiana; Memphis, Tennessee; and Milwaukee, Wisconsin. Evidence already in the complaint from the Chicago metropolitan area was supplemented with additional properties near Chicago. NFHA also made claims to HUD that U.S. Bank is involved in the same type of practices in Baltimore. The new information now brings the total to 24 cities in 11 metropolitan areas where U.S. Bank is alleged to have discriminated in the maintenance and marketing of its bank-owned homes and homes for which it is the owner of record as the trustee. The number of new properties added to the U.S. Bank complaint is 96, bringing the total number of properties to 273. NFHA's original complaint was filed with HUD on April 17, 2012, and included Atlanta, Georgia; Dayton, Ohio; Miami-Fort Lauderdale, Florida; Oakland-RichmondConcord, California; and Washington, D.C. The civil rights group alleges Bank of America and U.S. Bank continue to maintain and market foreclosed homes in white neighborhoods in a much better manner than in AfricanAmerican and Latino neighborhoods. Failing to maintain and market homes because of the racial or ethnic composition of the neighborhood violates the federal Fair Housing Act. Bank of America SVP Dan Frahm responded that NFHA had not contacted BofA about the properties referenced in the amended complaint, and if they had, Bank of America would have helped to ensure the accuracy of their information, Frahm said. "Bank of America applies uniform practices to the management and marketing of vacant bank-owned properties across the U.S., regardless of their location. Any suggestion to the contrary is simply untrue," Frahm said. "Previous claims by NFHA revealed numerous, material flaws in their methodology and how they represented that information publicly. The majority of properties NFHA faulted us for were, in fact, the responsibility of other entities to maintain and market, didn't take into account the property condition at the time we were granted authority to maintain it, and included properties the bank had agreed to donate to local groups in their existing condition." Shannah Smith, president and CEO of NFHA, says Bank of America's policies allow home prices to deteriorate to the point that investors can buy them at a discount. VISIT US ONLINE @ DSNEWS.COM "Every day Bank of America continues to neglect homes it owns in communities of color and prices decline, allowing investors to snatch up these foreclosures, turning communities into neighborhoods of absentee landlords," Smith said. "Bank of America is the second largest commercial bank in the United States and it has been on notice of these problems since 2009. And yet, Bank of America chooses to ignore its responsibility to maintain and market foreclosures regardless of the racial or ethnic makeup of the community." According to Smith, "U.S. Bank has failed to take care of homes that it owns and for which it is the owner of record in the communities of color we have investigated. U.S. Bank's actions have significant financial and health impacts on local governments, schools, neighborhoods, and homeowners who live near these neglected properties. Homes with broken and boarded windows and overgrown lawns become targets for vandalism, dumping, and criminal activity." U.S. Bank, however, maintains it has done nothing wrong. "Unfortunately, NFHA's claims against U.S. Bank have been inaccurate. U.S. Bank is one of the nation's leading corporate trustees, which is important in this matter because it means we have no legal right to service or maintain properties that are held in an investment pool for which we are trustee," explained Thomas Joyce, SVP and director of corporate public relations for U.S. Bancorp. "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," Joyce stressed. He says the bank has been fully cooperative with NFHA and will continue to investigate the claims made against it. "When we do own a property, we have a strong and comprehensive process in place to regularly inspect and maintain properties to marketing standards, where we have legal access, regardless of their location," Joyce said. "Of the non-trust properties identified by NFHA, the vast majority of those homes have been—conveyed or transferred to HUD, which requires maintenance to HUD standards–and approval by HUD—before they are conveyed. The remaining few houses identified by the 2012 report were immediately inspected and any issues were quickly addressed." The Fair Housing Act makes it illegal to discriminate based on race, color, national origin, religion, sex, disability, or familial status, as well as the race or national origin of residents of a neighborhood. The law applies to housing and housing-related activities, which include the maintenance, appraisal, listing, marketing, and selling of homes. 43

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