NEW YORK — A housing-advocacy group filed a complaint with the government on Tuesday alleging that Wells Fargo & Co. (WFC) did a shoddy job of maintaining foreclosed homes in low-income, minority neighborhoods while keeping properties in affluent areas in better shape.
The National Fair Housing Alliance and four affiliated organizations filed the complaint with the Department of Housing and Urban Development. The group evaluated 218 foreclosed properties owned by Wells Fargo in eight cities.
The group said in its complaint to HUD that the investigation of properties revealed "significant racial disparities" in maintenance and marketing of foreclosed homes for sale, with those homes in affluent white neighborhoods getting better treatment
"We hope that Wells Fargo will take immediate action to correct the stark racial and ethnic disparities we have found," said Shanna Smith, the group's chief executive.
Of the homes surveyed, 99 were in predominantly African-American neighborhoods, and 69 were in predominantly white neighborhoods, with the remainder in neighborhoods populated predominantly by other minority groups.
The group found that more than half of foreclosed homes in minority neighborhoods had trash piling up compared with 30% of Wells Fargo foreclosures in white neighborhoods.
In response, Wells Fargo spokeswoman Vickee Adams said in a statement that "we work hard to preserve foreclosed properties when they become vacant," using real-estate agents and property-preservation companies to "repair, renovate and preserve" the foreclosed home.
A HUD spokesman declined to comment. The complaint came as criticism has mounted of banks' efforts to maintenance of foreclosures. Last year, the city of Los Angeles sued Deutsche Bank AG (DB, DBK.XE), arguing that the bank allowed foreclosed homes to fall into disrepair.
Earlier this month, the fair-housing group issued a study that criticized the banking industry for maintenance of foreclosures. However, the study praised government-controlled mortgage finance giant Freddie Mac (FMCC) for providing a toll-free number for neighbors to report problems with properties and said Freddie Mac's policies generally resulted in better care. Freddie Mac's properties "in all neighborhoods appeared to be properly maintained and professionally marketed," the report said.
