Group alleges bias in Bank of America’s handling of KC area foreclosures

Bank of America has maintained its bank-owned foreclosures in white suburban neighborhoods in much better condition than those in minority Kansas City neighborhoods, a fair housing group alleged Tuesday.

The National Fair Housing Alliance and some of its member organizations said Tuesday they were amending a discrimination complaint filed with the U.S. Department of Housing and Urban Development to add data from investigations in the Kansas City area, Cleveland, New Orleans and Vallejo, Calif. The original complaint was filed in September 2012 and now encompasses 24 metro areas nationwide.

Bank of America staunchly denied the allegations.

The complaint says Bank of America neglected basic maintenance tasks in its foreclosures in African-American and Latino neighborhoods, while properly maintaining homes in white neighborhoods. The deficiencies included broken windows and doors, accumulated trash, overgrown lawns, lack of “for sale” signs and other issues affecting curb appeal and the ability to get the homes sold.

The alliance specifically looked at disparities in the handling of foreclosures in middle-class and working-class neighborhoods, not low-income areas, said Shanna Smith, president and CEO of the National Fair Housing Alliance, a consortium of more than 220 nonprofit fair housing organizations.

“Such neglect damages neighborhood property values, drains local tax revenues and creates health and safety risks for the community,” Smith said, adding that HUD and the Justice Department are investigating. A local HUD spokeswoman could not be reached for comment.

Bank of America issued a statement denying the group’s claims.

“Bank of America has a strong track record and uniform policies for properly maintaining and marketing properties, yet NFHA continues to present inaccurate and misleading information as ‘research,’ while, at the same time, seeking significant money from our company,” the statement said. “We are committed to investing in the communities we serve and delivering programs to customers in need of assistance.”

Smith said her group has provided accurate data to HUD and is trying to recover significant damages from Bank of America, but not out of greed. She said the alliance previously reached a $30 million agreement with Wells Fargo, and $27 million of that is going back into affected neighborhoods as grants to improve those communities.

In the Kansas City area, the complaint involves 14 properties. Six were in white suburban neighborhoods in Kansas and eight in minority neighborhoods in eastern Kansas City.

This story was originally published September 30, 2014 at 5:06 PM.