Today, Relman, Dane & Colfax PLLC filed a housing discrimination lawsuit against Fannie Mae on behalf of the National Fair Housing Alliance and twenty local fair housing organizations.
The lawsuit, filed in the United States District Court for the Northern District of California, alleges that Fannie Mae implemented policies and practices for maintaining its "real estate owned" (REO) properties that discriminate against minority communities. The plaintiffs conducted an extensive investigation of over 2300 Fannie Mae REO properties in 38 metropolitan areas over a four year period. The investigation showed that Fannie Mae did not conduct routine maintenance and marketing of REO properties in predominantly African-American and Latino neighborhoods but did maintain and market its REO properties in predominantly white neighborhoods.
Nationwide, 24% of Fannie Mae REO properties in communities of color had 10 or more maintenance or marketing deficiencies (such as unsecured, broken or boarded doors or windows; trash on the property; broken steps and handrails; and broken or hanging gutters). On the other hand, only 6% of Fannie Mae REO properties in predominantly white neighborhoods had 10 or more maintenance or marketing deficiencies. Fannie Mae's failure to maintain REO properties in communities of color has a significant harmful impact on those neighborhoods, threatening the residents' health and safety and diminishing surrounding property values.
Prior to filing litigation, the fair housing organizations met several times with Fannie Mae officials, informed them of the findings, and asked them to change their practices. However, the differences in maintenance of REO properties in minority and white neighborhoods continued and this lawsuit followed.