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Complaint focuses on unequal treatment of real estate-owned homes

When a bank forecloses on a homeowner and repossesses their property, they usually make an effort to maintain and market the property so it can be sold. Without attention, these real estate-owned or bank-owned properties often fall into a state of disarray. In South Carolina, banks have reportedly treated foreclosed properties in an inconsistent and discriminatory fashion.

According to a number of complaints filed with the Department of Housing and Urban Development, including one from Charleston, the Bank of America has paid special attention to foreclosed homes in predominantly white neighborhoods, while neglecting those in minority neighborhoods. This treatment has many residents looking for relief from the harmful effects of these foreclosures.

According to an investigation conducted by the National Fair Housing Alliance, unevenly designating resources to properties based on local demographics is a violation of federal non-discrimination laws. This is precisely why the group has filed complaints.

The housing alliance's study showed that real estate-owned homes in minority neighborhoods were more likely to have trash on the lawn, dead or poorly-maintained lawns and physical damage to the house's exterior. Furthermore, eight of every 10 of these homes did not have a "for sale" sign, which makes them very difficult to sell.

Aside from the unappealing nature of a run-down house with an unkempt lawn, these poorly maintained properties are hurting neighbors financially. Uncared for homes bring down neighbors' property values and spur increases in homeowner's insurance rates. Those affected by this problem wish to receive financial relief for the unfair treatment.

This report shows the wide-reaching effects that foreclosure can have on communities, particularly when properties are not properly managed after repossession. It also provides further incentive for distressed homeowners to seek an alternative to foreclosure. Proceeding with a short sale is one way for homeowners to escape mortgage debt and the long-term financial consequences that follow. As this story shows, fewer foreclosed properties may also have the power to benefit an entire neighborhood.

Source: AOL Real Estate, "Bank of America Hit by Another Discrimination Complaint Over Upkeep of Foreclosed Homes," Teke Wiggin, Oct. 24, 2012

  • Our firm has experience helping South Carolina families discover positive alternatives to foreclosure. To learn more about your options when facing repossession, please see our foreclosure law page.

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