Federal lawsuit claims housing discrimination in Dayton area

A local housing group is among 20 that have sued Fannie Mae in federal court, claiming the agency doesn’t care for foreclosed homes in minority neighborhoods as well as it does for houses in predominantly white locales.

In the Dayton are, 68 foreclosed homes were investigated in preparing for the suit, said Pamela Bond, a spokeswoman for the National Fair Housing Alliance, the principal agency behind the suit.

On its web site, the alliance identifies homes from Miamisburg and Centerville, north to Huber Heights and Vandalia. Most of the foreclosed homes found to have 10 more “deficiencies” were located in central or west Dayton ZIP codes.

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Jim McCarthy, chief executive of Dayton’s Miami Valley Fair Housing Center, called the problem “very frustrating,” for him and for people who live in affected neighborhoods.

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“We really need Fannie Mae to step up to the plate,” he said.

A message was left for a Fannie Mae spokeswoman.

McCarthy said investigators found plenty of problems at local homes: Broken windows that had not been boarded, garbage left behind, grass left uncut and homes that are not marketed for sale.

“They have an obligation to maintain the property in the condition in which it was received,” he said. “We are not asking that they improve the property in any way.”

The alliance will not give addresses of individual problem homes because some of the properties have been sold, said Shanna Smith, alliance CEO.

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Fannie Mae “purposely fails to maintain its foreclosures … in middle- and working-class African American and Latino neighborhoods to the same level of quality it does for foreclosures it owns in white middle- and working-class neighborhoods,” the alliance said in a statement Monday.

Linked to the federal government, Fannie Mae backs most residential mortgages, buying loans from lenders and making other loans and mortgages possible.

Other Ohio fair housing agencies — in Columbus, Cleveland and Toledo — are involved in the suit, according to the Washington, D.C.-based alliance.

The lawsuit is based on what the alliance called a “multi-year investigation.” Nationally, the alliance identified what it said were numerous examples of neglect, even including a photograph in a media release of what it said was a dead rat found on the driveway of a foreclosed home in Richmond, Calif. in 2013.

In 2013, the alliance announced a $27 million settlement with Wells Fargo over the treatment of unoccupied homes owned by the bank in a similar complaint, this one an administrative complaint filed with the U.S. Department of Housing and Urban Development. The Miami Valley Fair Housing Center, which is part of the alliance, received $1.4 million in that settlement.

The issue of how banks and other responsible agencies care — or fail to care — for properties on their portfolios has long simmered, particularly in the years after the Great Recession.

When homes are left vacant, minor issues can become major over time, especially where houses are vulnerable to the elements in cold or warm climates. Pipes burst in cold weather. Mold forms in warm weather.

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