Petruszak's group has been a party to other HUD complaints against lenders such as Wells Fargo, U.S. "We are confident that our standards ensure that properties in all neighborhoods are treated equally, and we perform rigorous quality control to make sure that is the case," the lender said. In a statement, Fannie Mae said the allegations have no merit and denied that it engages in discriminatory maintenance practices. The complaint, filed May 13, claims that Fannie Mae and its field service companies - firms hired to maintain the inventory of foreclosed properties - displayed "differential treatment" in maintaining and/or marketing houses "on the basis of race, color and/or national origin of the neighborhood in which the properties are located." They said fewer of those problems were apparent at houses in the predominantly white communities, and the appearance of those homes would be more appealing to potential buyers. Homes in the minority communities were more likely to have trash on the property, boarded-up doors and windows, overgrown lawns and shrubs and damaged gutters and downspouts, according to the housing groups' complaint. The housing center's staff evaluated 78 Fannie Mae-owned properties in south suburbs with majority-black populations - including Dolton, Hazel Crest and Riverdale - and compared conditions to houses Fannie Mae owns and is offering for sale in towns such as Mokena, Oak Forest and Tinley Park. Department of Housing and Urban Development, contending that Fannie Mae violated federal law by neglecting foreclosed sites in minority neighborhoods in 34 metro areas. The National Fair Housing Alliance, South Suburban Housing Center and other housing groups around the country are part of the complaint that was filed with the U.S. Poorly kept homes generally aren't attracting buyers, and the condition of such houses hurts property values in the neighborhoods where they're located, Petruszak said. "Special measures have to be taken to help those communities recover."Ī national housing discrimination complaint that the housing center is a party to alleges that Fannie Mae is making matters worse by not taking care of foreclosed properties it owns in predominantly minority communities, while doing a better job with homes in towns that are largely white. "In communities of color, predatory lending and mortgage fraud were more predominant," John Petruszak, executive director of the South Suburban Housing Center, said. With few exceptions, home values and sale prices in those towns rife with distressed properties fell further in the wake of the economic recession, and their recovery has lagged. He said the authority plans to work with local banks to try to create special mortgage products to address that. "We know appraisals are going to be an issue." It is "one of the big challenges, and we're trying to work through that," he said. "We think it's going to be a big source of properties for us."īut Rydin acknowledges that there could be obstacles in selling the rehabbed homes, with some buyers running into difficulties getting financing because prices of nearby distressed properties are lower. "The discounts we're seeing are pretty aggressive," he said. Rydin said his group - whose member communities include Blue Island, Hazel Crest, Midlothian, Oak Forest and Park Forest - has previously purchased properties from Fannie and Freddie, but some homes didn't make sense to buy from an economic standpoint until this test program.
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