Housing Group Accuses US Bancorp Of Foreclosure Maintenance Lapses

Date : 04/17/2012 @ 1:52PM
Source : Dow Jones News
Stock : U.S. Bancorp (USB)
Quote : 51.77  -0.02 (-0.04%) @ 4:00PM

Housing Group Accuses US Bancorp Of Foreclosure Maintenance Lapses

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A housing-advocacy group alleged Tuesday that U.S. Bancorp (USB) failed to maintain and market for sale foreclosed homes in minority neighborhoods, while putting more effort into upkeep of properties in predominantly white neighborhoods.

The National Fair Housing Alliance filed the complaint with the Department of Housing and Urban Development, following a similar complaint filed last week against Wells Fargo & Co. The group evaluated 177 foreclosed properties owned by U.S. Bank in seven cities as part of a larger evaluation of banks' foreclosure-maintenance practices.

"Properties that are poorly maintained not only lose value but have a higher likelihood of selling to an investor, rather than to a family," said Shanna Smith, the group's chief executive. "U.S. Bank is making it harder for the market to come back in communities of color."

The group found that properties in minority neighborhoods were far more likely to have piled-up trash, boarded and unsecured windows, or broken doors.

U.S. Bank spokesman Tom Joyce said that the bank is one of the largest corporate trustees for investment pools that own mortgage loans and noted that the bank doesn't have responsibility for property maintenance in those cases.

"When we do own a property, we have a strong and comprehensive process in place to regularly inspect and maintain properties to marketing standards where we have legal access, regardless of their location," he said.

A HUD spokeswoman declined to comment.

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 its policies generally resulted in better care.

-By Alan Zibel, Dow Jones Newswires; 202-862-9263; alan.zibel@dowjones.com

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