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New federal lawsuit claims housing discrimination in Dayton

The National Fair Housing Alliance, with 19 fair housing organizations, including one in Dayton, filed a lawsuit Thursday in federal court against Deutsche Bank for allegedly neglecting foreclosed and bank-owned homes in minority neighborhoods in Dayton and elsewhere.

The suit was filed against Deutsche Bank; Deutsche Bank National Trust; Deutsche Bank Trust Company Americas; Ocwen Financial Corp.; and Altisource Portfolio Solutions, Inc., the alliance said.

The alliance says that Ocwen and Altisource are the “servicer and property management company responsible for maintaining and marketing a large number of Deutsche Bank’s properties.”

RELATEDFederal lawsuit claims housing discrimination in Dayton area

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The defendants in the suit are denying the charges, with one company saying the suit is relying on “discredited” data.

“The (National Fair Housing Alliance) research, relied on as the basis of its claims, was previously discredited in 2016 by the U.S. Department of Housing and Urban Development in connection with another claim against a large U.S. bank,” a spokeswoman for Altisource said in response. 

A collection of photos accompanying the lawsuit announcement  found at NationalFairHousing.org examines homes said to have been neglected in Dayton and elsewhere, reflecting the findings of an investigation by the Miami Valley Fair Housing Center from 2011 to 2016.

With empty, banked-owned properties, banks and allied institutions are expected to mow lawns, maintain structures and keep the homes in decent condition in a number of ways.

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The report  looks at a total of 36 Deutsche Bank-owned properties in the Dayton area, with 15 of the homes owned in African-American communities and 21 found in predominantly white communities.

Among the Dayton-area disparities claimed in the report:

    • Forty percent of Deutsche Bank properties in communities of color had trash or debris on the property, while just 23.8 percent of properties in white communities had the same problem.
    • Just over 73 of Deutsche Bank-owned properties in communities of color had overgrown grass or dead leaves, while only 33.3 percent of properties in white communities had the same issue.
    • Just over 53 percent of Deutsche Bank properties in communities of color had overgrown or dead shrubbery, while 28.6 percent of properties in white communities had the same issue.

The federal lawsuit charges that Deutsche Bank “purposely failed to maintain its foreclosed bank-owned homes in middle- and working- class African American and Latino neighborhoods” in 30 cities overall, while it “consistently maintained” similar bank-owned homes in white neighborhoods.

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The lawsuit is supported by “substantial photographic evidence,” the alliance said.

In late 2016, the Miami Valley Fair Housing Center was among 20 organizations that filed a similar suit with similar allegations against Fannie Mae, a corporation linked to the federal government that backs most residential mortgages, making loans and mortgages possible.

In preparation for that 2016 lawsuit, 68 foreclosed Dayton-area homes were investigated.

Jim McCarthy, chief executive of Dayton’s Miami Valley Fair Housing Center, called the problem “very frustrating,” in 2016.

McCarthy on Thursday said the problem remains “persistent.”:

“This is still fallout from the foreclosure crisis. Our community was impacted pretty heavily, particularly in the African-American community,” he said. 

A representative of Deutsche Bank declined to comment at length, beyond saying that the bank acts only as a trustee for the properties. 

Ocwen released a response denying the allegations, saying: “Ocwen cares about communities, and is committed to equal maintenance and marketing of bank-owned homes no matter where they are located in the U.S. We believe we have in place the necessary quality control standards designed to ensure that all properties are handled consistently regardless of their location. (The National Fair Housing Alliance) has previously made these same allegations against numerous other institutions in other complaints.” 

In its own response, Altisource called the suit’s charges without merit.

“Altisource is a property preservation vendor operating on behalf of institutions that service mortgages and foreclosed homes. The NFHA assertions misrepresent both Altisource’s conduct and our role as a property preservation vendor.” 

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