UPDATE 1-Fair housing group expands BofA discrimination complaint

Tue Oct 23, 2012 5:50pm EDT

* Maintenance of foreclosed properties at issue

* HUD complaint amended to include Midwest cities

* Bank of America denies allegations

By Aruna Viswanatha

WASHINGTON, Oct 23 (Reuters) - A nonprofit group has accused Bank of America Corp of maintaining foreclosed homes in white neighborhoods in the U.S. Midwest much better than those it owns in nearby black and Latino neighborhoods, and of marketing the homes in white neighbhorhoods more effectively.

The National Fair Housing Alliance filed the accusations with the U.S. Department of Housing and Urban Development on Tuesday. They come after NHFA filed similar accusations last month against Bank of America, which alleged disparities in the maintenance and marketing of foreclosed homes in California, Michigan, and along the East Coast.

The new details potentially increase pressure on the second-largest U.S. bank as HUD investigates the charges.

In the complaint filed on Tuesday, the group said it investigated around 110 additional properties in Chicago, Milwaukee and Indianapolis, and systematically found more damaged windows, overgrown lawns, and substantial amounts of trash on foreclosed properties in minority neighborhoods than in nearby white neighborhoods.

In September, the group filed its original complaint and said it had reviewed 373 properties owned, managed or serviced by Bank of America in neighborhoods with high foreclosure rates.

Earlier in October, it amended the allegations to include issues the group said it found with homes in Orlando, Florida, and Charleston, South Carolina.

A Bank of America spokesman referred to the bank's statement from last month, saying it shares the group's concerns about neighborhoods but that it strongly denies the allegations and stands behind its property maintenance and marketing practices.

A HUD spokeswoman said the agency will continue to investigate the allegations.

The new allegations add to a growing number of complaints filed against big banks over charges of discrimination. NFHA previously filed similar complaints against Wells Fargo & Co and U.S. Bancorp.

The group has said it held discussions with Wells and U.S Bancorp, and has not filed new accusations against either bank.

The American Civil Liberties Union last week sued Morgan Stanley in federal court and said the bank encouraged a unit of now-bankrupt New Century Financial Corp to target black borrowers disproportionately with overpriced loans that had a strong possibility of going sour.

In July, Wells Fargo agreed to pay $175 million to settle allegations that it discriminated against black and Latino borrowers, though it denied the claims.

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