Earlier this month, my Atlanta organization, Metro Fair Housing Services, announced that it will team up with Wells Fargo to make sure our communities have an equal chance at recovery from the housing crisis. With this agreement, Wells Fargo propelled itself as the industry leader committed to establishing quality standards for the way REO properties are maintained and marketed.
What are REO properties? They are “real estate owned” — homes that we see all too often around Atlanta, homes that were foreclosed upon, lay vacant and are bank-owned.
In 2012, the National Fair Housing Alliance, Metro Fair Housing Services and others published the results of our investigation into how REO properties are treated by banks. We wanted to see whether banks were treating properties differently because of a neighborhood’s racial makeup. Unfortunately, we found significant racial disparities in how banks were marketing and maintaining REO properties.
Some of the findings about Atlanta REO properties in communities of color:
• 70 percent had peeling or chipped paint; only 17 percent in white communities had the same problem.
• 40 percent had broken doors or locks; only 17 percent did in white communities.
• 42 percent had broken or hanging gutters; none in white communities did.
• 26 percent had pervasive mold on the structure, while none in white communities did.
Because of our investigation’s findings, we filed complaints with the U.S. Department of Housing and Urban Development against Wells Fargo, U.S. Bank and Bank of America. Wells Fargo stepped up and will become the first bank to improve its REO practices.
We recently announced our settlement with Wells Fargo and the bank’s agreement to put $27 million toward programs in 19 cities nationwide. These funds will promote home ownership, neighborhood stabilization, property rehabilitation and development in neighborhoods of color.
Atlanta is receiving $1.4 million. No doubt, the money will help address the impacts that maintenance and marketing deficiencies caused in our communities. This will help stop the bleeding of property values in some areas.
Other banks need to step up. Bank of America and U.S. Bank have done little to improve the maintenance and marketing deficiencies of homes they own.
When we conducted our investigation a year ago, 80 percent of the Bank of America REOs in Atlanta communities of color were missing a “for sale” sign. Without a sign, potential home buyers and neighbors simply don’t know the home is available. About three-quarters of U.S. Bank properties in Atlanta’s minority communities had substantial amounts of trash. This is an easy problem to fix and should be addressed immediately.
We applaud Wells Fargo for its leadership. We appreciate its commitment to our neighborhoods and look forward to working together to improve Atlanta.
Gail Williams is executive director of Metro Fair Housing Services.
