Fannie Mae is being accused of something very serious.
According to civil rights activists, this government enterprise is responsible for minority neighborhoods in Cleveland being neglected. The result is pockets of foreclosed properties, which creates a secondary problem of increased gang activity, a greater number of drug houses, squatters, and more.
As reported by Journal Transcript, activists claim that Fannie Mae discriminates against minorities who live the Cleveland, Ohio. As stated by a representative with the National Fair Housing Alliance, this government enterprise has failed to take care of homes that have gone into foreclosure. They state that foreclosed homes in black neighborhoods are being completely overlooked while those in white neighborhoods are well cared for.
Formal Complaint Filed
Things have become so bad that a formal complaint was filed with the United States Department of Housing and Urban Development (HUD), the National Fair Housing Alliance (NFHA), and 19 additional fair housing groups located throughout the country. As part of the complaint, the federal Fair Housing Act is being violated by Fannie Mae since foreclosed homes in black and Latino neighborhoods are neglected while homes in white neighborhoods are in good condition.
These neighborhoods are spread out across 34 metropolitan areas of the city. In response to the complaint, the NAFA along with the House Center in Cleveland, a not-for-profit organization, walked through 42 homes that had gone into foreclosure. These were broken down as 29 in white neighborhoods, 10 in black neighborhoods, and three in other minority areas.
The areas included Garfield Heights and Berea, which are predominantly white, as well as East Cleveland and Slavic Village that are primarily black. Of the homes reviewed in minority areas, trash was visible on the outside for 7 out of 13. In addition, 6 homes had dead or overgrown landscaping while 5 had broken, boarded up, or unlocked windows.
The investigation conducted by NAFA spanned a period of five years, this according to Shanna Smith, president and CEO of NFHA. Along with a review of foreclosed neighborhoods in Cleveland, the study included Columbus, Toledo, and Dayton. When the investigation was complete, NAFA presented a slide show that reveals the mentioned problems but also accumulated mail, damaged or missing gutters, old discarded furniture, and even dead animal carcasses.
Anne Houghtaling, executive director of Chicago’s HOPE Fair Housing Center said Fannie Mae properties are visible from blocks away. She added that along with being unsightly, foreclosed homes brought neighbor’s property value down and prevented minority communities from recovering at the same speed as seen in white communities.
NAFA looked at more than 2,000 foreclosed homes owned by Fannie Mae with specific findings:
- 22 percent of minority neighborhoods had at minimum 10 problems compared to 8 percent for predominantly white neighborhoods
- 50 percent of foreclosed properties in white neighborhoods had less than five problems while in minority neighborhoods, the percentage increased to 24
There was a lot of push back from Fannie Mae with spokesman Andrew Wilson denying the accusations. He said the enterprise stands behind their standards. However, NAFA encourages Fannie Mae to do the right thing by stopping the discrimination and settling tens of millions of dollars needed to make appropriate improvements.