HUD announced that it settled claims alleging a national bank violated the Fair Housing Act regarding its maintenance and marketing practices for real estate owned properties. The complaint against the bank was filed by the National Fair Housing Alliance after it released a report on discrimination in the maintenance and marketing of REO properties. The complaint alleged that the bank engaged in differential treatment of REO properties on the basis of race, national origin or other prohibited grounds. In particular, it was alleged that the bank systematically failed to maintain properties in predominantly African American, Hispanic, and other nonwhite communities as opposed to properties located in mostly white communities.
The terms of the settlement require the bank to invest in minority neighborhoods hit hard by the foreclosure crisis, contribute to various programs that support homeownership, neighborhood stabilization, property rehabilitation, and housing development and enhance the bank’s practices of maintaining and marketing REO properties (e.g., by extending the amount of time that such properties are exclusively available for purchase by an owner-occupant or a non-profit organization).