April 10, 2012 / 10:00 PM / 6 years ago

Housing group files bias complaint against Wells Fargo

WASHINGTON (Reuters) - A nonprofit group on Tuesday filed a discrimination complaint with the U.S. government accusing Wells Fargo & Co. of a failure to maintain foreclosed homes in minority neighborhoods compared with those vacant properties it owns in white areas.

The complaint was filed by the National Fair Housing Alliance with the U.S. Department of Housing and Urban Development.

“We found that with Wells Fargo, there was a neglect of simple things -- a lack of routine maintenance and security of the property -- that just didn’t happen in African American and Latino neighborhoods across the board,” said Shanna Smith, President of the National Fair Housing Alliance.

The complaint stemmed from years of investigations by the group, which advocates for minorities on housing issues, into how major lenders maintain and market bank-owned properties in various real-estate markets across the nation.

In its complaint filed with HUD, the group said that in an independent investigation they completed on foreclosed properties owned by Wells Fargo, disparities existed in the maintenance and marketing of vacant homes for sale in minority neighborhoods compared with those homes in white neighborhoods.

A spokesperson for HUD declined to provide any comment on the group’s complaint. A spokesperson for Wells Fargo was not immediately available to provide a response to the complaint.

The group evaluated foreclosed properties owned by Wells Fargo in eight cities: Atlanta, Baltimore, Dallas, Dayton, Ohio, Miami, Oakland, California, Philadelphia and Washington, D.C. They looked at 218 foreclosed properties owned by Wells Fargo.

Included in the survey were 149 properties located in neighborhoods occupied by minority groups, of which 99 that were in predominantly African-American neighborhoods, while the remainder were populated in mostly white communities.

The group used various statistics from its investigation to allege that white communities were taken much better care of. For example, the group said that 56 percent of the foreclosed properties surveyed in the minority communities had substantial amounts of trash piling up, compared with 30 percent of Wells Fargo foreclosures in white neighborhoods that had the same problem.

“I was just astonished by how poorly maintained so many of Wells Fargo properties were,” said Smith. “When you drive through some of these neighborhoods of color, you would just be stunned by the overgrowth of weeds, often there’s no for-sale sign in front of the house, some look completely abandoned.”

In a report released by the group earlier this month, they faulted the banking industry for discrimination in the care and maintenance of foreclosures, and offered evidence of disparity in how banks keep up properties and market them in white communities compared to properties in black and Latino neighborhoods.

Reporting By Margaret Chadbourn

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