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 it 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.
Tom Goyda, a Wells Fargo spokesman, said in a statement that the institution "conducts all lending-related activities in a fair and consistent manner without regard to race, and this includes maintenance and marketing standards for all foreclosed properties."
"Regrettably, the complaint does not include specific property information that can allow us to investigate the circumstances in any of the markets they list," he said.
Wells Fargo said that when it is responsible for a property it has a department that conducts monthly inspections, completes maintenance work and secures and winterizes homes. In other instances, the bank may service the loans, but the investors who own the mortgages handle the maintenance and sale of their properties after foreclosure.
The nonprofit 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 properties in 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; Additional reporting by Rick Rothacker in Charlotte, North Carolina; Editing by Bob Burgdorfer)
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