The Fair Housing Center, along with the National Fair Housing Alliance (NFHA) and 19 other local fair housing organizations throughout the country, reached a landmark $53 million agreement with Fannie Mae (formally known as the Federal National Mortgage Association) to resolve a case arising from allegations that Fannie Mae treated foreclosed homes in communities of color unfavorably. The settlement will help rebuild and strengthen communities of color in 39 metropolitan areas including Toledo. In the case, The Fair Housing Center and the other plaintiffs alleged that Fannie Mae maintained and marketed its foreclosed homes in predominantly White neighborhoods while allowing similar homes in communities of color to fall into disrepair and that this differential treatment exacerbated the damage caused by the 2008 mortgage crisis and impeded recovery from the crisis in neighborhoods of color. The case was the first time a federal court confirmed the nation’s fair housing laws cover the maintenance and marketing of Real Estate Owned (REO) properties.
“The vitality of our neighborhoods and the health and well-being of our residents are directly tied to the quality of our housing stock,” stated Marie Flannery, President and CEO of The Fair Housing Center. “The neglect of foreclosed properties contributed to blight, decreased property values, restricted access to homeownership, and depleted wealth in Toledo’s neighborhoods of color, perpetuating longstanding housing inequities. We’re grateful to NFHA and everyone involved in this case for their commitment to reaching a resolution that will provide the necessary resources to restore and rebuild communities disproportionately impacted by housing instability. We look forward to engaging with local stakeholders to develop a plan for reinvesting these settlement dollars to revitalize Toledo’s neighborhoods through housing rehabilitation and development. This effort brings us one step closer to ensuring everyone in our community, regardless of their ZIP Code, can find safe, stable places to call home.”
The plaintiffs’ 2016 allegations against Fannie Mae arose after a comprehensive, four-year investigation of more than 2,300 Fannie Mae-owned foreclosed properties in 39 metropolitan areas in the country. Of those properties, approximately 127 were located in Toledo. The plaintiffs collected more than 49,000 photographs revealing poorly maintained properties in Black and Latino communities, particularly as compared to properties in predominantly White neighborhoods.
Today’s agreement has far-reaching implications. The Fair Housing Center and the other plaintiffs will invest the vast majority of the settlement monies directly back into the communities they allege were harmed by Fannie Mae’s conduct. Specifically, plaintiff organizations will use over $35 million of the settlement to promote home ownership, neighborhood stabilization, access to credit, property rehabilitation, and residential development in the 39 metropolitan areas at issue in the case, including Toledo. The plaintiffs will manage and disburse the settlement funds, providing much-needed grants, including for down-payment assistance for first-generation homebuyers and renovations for homes that languished in foreclosure. The grants will also include innovative programs and partnerships to promote fair housing.
Fannie Mae implemented practices that will help avoid similar harmful treatment of communities of color in the future, including increasing its oversight of maintenance of properties it owns, prioritizing owner-occupants rather than investors as purchasers of REOs, and ensuring that it complies with fair housing laws, including by providing fair housing training to its employees and vendors.
The Fair Housing Center and the other fair housing groups are represented by noted civil rights law firms Relman Colfax PLLC and Dane Law LLC. The organizations were also represented by Morgan Williams, NFHA’s General Counsel, and Julia Howard-Gibbon, Supervising Attorney of Fair Housing Advocates of Northern California.
U.S. Department of Housing and Urban Development grants supported the investigation into potential disparities in the maintenance and marketing of REO properties. The author and publisher of this press release are solely responsible for the accuracy of the statements and interpretations contained in this publication. Such interpretations do not necessarily reflect the views of the Federal Government.