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Federal Discrimination Complaint Filed Against Fannie Mae

Posted on 13. May, 2015 by

Wednesday, May 13th – The National Fair Housing Alliance (NFHA) and 19 other fair housing organizations across the country have filed a discrimination complaint against the federally-backed mortgage giant Fannie Mae. The complaint is based on evidence of disparities in upkeep of foreclosed properties in African-American neighborhoods versus white neighborhoods, in violation of the federal Fair Housing Act.

Persistent inconsistencies in maintenance of properties owned by Fannie Mae were found in a nationwide study of over 2,100 cases in sixty-three cities. Upkeep deficiencies were far more prevalent in African-American communities than in white communities, suggesting discrimination in the federally- owned mortgage association’s practices. In New Orleans, 100% of Fannie Mae’s properties in African-American communities had at least five maintenance deficiencies, ranging from extensive water damage to downed power lines. In white communities, less than 56% of properties showed visible neglect.

Fair housing organizations, including the Greater New Orleans Fair Housing Action Center (GNOFHAC), used 39 maintenance measures to evaluate Fannie Mae’s upkeep of foreclosed homes. Trash, overgrown grass, broken windows, broken doors, graffiti, excessive peeling paint, and pervasive mold were more likely to be left unaddressed in non-white neighborhoods. Unkempt homes suggest danger and disorder, and have been shown to depress neighborhood property values for working- and middle-class African-American families.

Implications go beyond lowered property values for communities with foreclosed residencies. Blight has been linked to increased health problems. Mariana Arcaya, Sc.D., M.C.P. of Harvard’s T.H. Chan School of Public Health notes that “increases in blood pressure observed could be due in part to unhealthy stress from residents’ perception that their own properties are less valuable, their streets less attractive or safe and their neighborhoods less stable.”

According to the National Fair Housing Alliance, Fannie Mae was notified of these troubling and consequential disparities in June 2009. Results of the study, which was conducted between 2010 and April 2015, show that the mortgage giant’s discriminatory practices have been ongoing.

Download a PDF including images of findings in Baton Rouge and New Orleans.

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