New allegations of disparities in maintenance of foreclosed homes in metro areas around the country, including Chicago’s south suburbs and northwest Indiana, were raised by fair housing organizations in a federal complaint filed Wednesday.
The filing with the U.S. Department of Housing and Urban Development amends a complaint first filed in February 2014 accusing Deutsche Bank of housing discrimination by doing a better job maintaining foreclosed properties located in predominately white communities than in communities with significant black and Latino populations.
The amended complaint adds Ocwen Financial and Altisource Portfolio Solutions as respondents in the HUD matter.
The filing was made by the National Fair Housing Alliance as well as regional fair housing groups, including the Homewood-based South Suburban Housing Center, HOPE Fair Housing in Wheaton and Open Communities in Winnetka.
The Chicago-area organizations evaluated 127 properties in the Chicago area and northwest Indiana, and in findings filed with the complaint cited numerous instances of foreclosed homes in predominantly minority communities often having unkempt lawns, trash and other debris in yards and boarded-up or unsecured doors.
By contrast, properties in largely white communities were better maintained, the groups said.
A spokesman for Deutsche Bank said the bank had no comment. Ocwen and Altisource were added to the HUD complaint because the companies are responsible for maintenance and marketing of the properties.
Ocwen, in a statement, said it had not yet had a chance to review the complaint, but denied the allegations and insisting they have no merit.
“The company will vigorously defend itself against these allegations. Ocwen cares about communities, and is committed to equal maintenance and marketing of bank-owned homes no matter where they are located in the U.S.,” the company said.
Altisource, in a statement, said the allegations have no merit and are based on research by the National Fair Housing Alliance in a different matter that was discounted by HUD.
Altisource, a Boston-based property preservation company, said the alliance’s assertions “misrepresent both Altisource’s conduct and our role as a property preservation vendor.”
Morgan Williams, general counsel for the alliance, said the “evidence forming the basis of the amended complaint” against Altisource and Ocwen is different than the data Altisource cited as having previously been discredited by HUD. That investigation involved a mortgage lender rather than property maintenance firm, he said.
In its statement, Altisource said it “is committed to the principles of fair housing and neighborhood stabilization,” and that its services are carried out “without regard to the racial composition of a neighborhood.”
The South Suburban Housing Center, HOPE and Open Communities sent investigators out to inspect the conditions of foreclosures throughout the Chicago area. The examination of homes in northwest Indiana was done over a three-year period ending in 2015, while the investigation in Chicago and its suburbs was over a five-year period ending in 2016.
Their reports noted that along with the disparities in upkeep, poorly maintained properties hurt the ability of neighbors to refinance or sell their own homes because the appearance of adjacent foreclosures depressed surrounding property values.
The South Suburban Housing Center looked at properties in communities in the Southland such as Harvey and Worth, contrasting the appearance, or curb appeal to prospective buyer, of each. In northwest Indiana, the group examined 22 properties in Gary and nearby communities, such as Hobart.
The allegations made by the fair housing groups are similar to those raised in a federal lawsuit they filed last year against mortgage lending giant Fannie Mae, alleging a double standard in maintaining foreclosures. That case is still proceeding and is in the discovery phase.
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