Deutsche Bank accused of racial discrimination
Housing advocates are accusing Deutsche Bank (DB) of racial discrimination, claiming the German financial giant is neglecting to take care of homes it owns in minority neighborhoods.
Such poor upkeep makes properties harder to sell, according the National Fair Housing Alliance. The nonprofit group filed a complaint with the U.S. Department of Housing and Urban Development on Tuesday alleging that Deutsche Bank-owned homes located in white neighborhoods are better maintained and helped by professional marketing.
"You can see all these areas of color are becoming more and more blighted" because of the alleged neglect from Deutsche Bank, said National Fair Housing Alliance chief executive Shanna Smith in a conference call with reporters. "The banks better maintain the homes in the white neighborhoods, and they sell fairly quickly."
Deutsche Bank denies the allegations. "Deutsche Bank as trustee does not engage in any of the activities alleged in the complaint," the company said in an emailed statement. "Loan servicing companies, and not Deutsche Bank as trustee, are solely responsible for the maintenance, marketing and resale of foreclosed properties."
The allegations of discriminatory housing practices may sound familiar. Other banks have been accused of failing to properly maintain homes in minority areas, with the NFHA claiming in a 2012 investigation that six of the country’s biggest banks failed to aggressively market and maintain foreclosed homes in non-white communities. The NFHA has also filed similar complaints against U.S. Bank and Bank of America (BAC).
Many of the homes owned by Deutsche Bank are also located in neighborhoods where U.S. Bank and Bank of America own properties, creating a worsening blight in those communities, Smith alleged. That leads to greater demands on taxpayers and new problems such as rodents, insects and vandals, she added.
The complaint, which was also joined by HOPE Fair Housing Center, Open Communities and South Suburban Housing Center, alleges discriminatory behavior in three cities: Washington, Memphis and Chicago.
The complaint hinges on the federal Fair Housing Act’s requirement that banks, loan servicers and trustees such as Deutsche Bank maintain and sell properties they own regardless of the race or national origin of the people who live there.
The NFHA surveyed 129 properties in the three cities and found "significant racial disparities in maintenance and marketing in all three metropolitan areas."
In properties owned by Deutsche Bank in Washington, more than half of the homes had "substantial trash" on the property, compared with only 25 percent of properties in white neighborhoods, according to the complaint. Almost half of the homes in non-white areas had dead grass, while only half of the homes in white neighborhoods did, the group further alleges.
Deutsche Bank said it doesn’t have control over the properties’ maintenance, noting that it "does not select, hire or compensate the loan servicers, nor does it have any role in, or oversight over, the actions the servicers take in connection with foreclosed properties."