BY MAUDLYNE IHEJIRIKA Sun-Times Staff Reporter February 25, 2014 7:28PM Updated: February 26, 2014 11:20AM
A national housing group on Tuesday alleged racism mars the way Deutsche Bank maintains vacant, foreclosed properties, saying it allows those homes in black and Latino communities to deteriorate, while upkeeping them in white communities.
The complaint filed with the U.S. Department of Housing and Urban Development says the evidence was glaring in its investigation of some 130 properties in Chicago, Washington, D.C. and Memphis.
Foreclosed homes in black and Latino neighborhoods were characterized by trash strewn across the properties, broken windows or doors, overgrown lawns, mold and water damage, and other problems, while homes in white communities were immaculately maintained, the National Fair Housing Alliance said.
“In predominantly African-American and Hispanic communities, Deutsche Bank is not a particularly good neighbor,” said Gail Schechter, executive director of Open Communities in Winnetka, among three local fair housing groups working in Chicago’s north shore, northwest and south suburbs, which joined the complaint.
Similar complaints have been filed by the national group in the past against Bank of America and U.S. Bancorp.
In June, 2013, Deutsch Bank was forced to settle a lawsuit with the city of Los Angeles over the similar accusations that it allowed slum conditions at hundreds of foreclosed properties, leading to the destabilization of communities, the alliance said.
“That $10 million settlement should have inspired Deutsche to change its business model and increase quality control measures,” said alliance President and CEO Shanna L. Smith. “However, this initial investigation…clearly demonstrates the opposite.”
In Chicago, 55 percent of the bank’s properties in minority communities were strewn with trash; 27 percent had broken doors or locks and 40 percent had damaged windows, according to alliance.
Deutsche Bank officials couldn’t be reached for comment.
But in a statement to Reuters Tuesday, Deutsche Bank denied engaging in activities alleged in the complaint, saying loan servicing companies are solely responsible.
“Deutsche Bank as trustee 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,” Deutsche Bank spokeswoman Renee Calabro said in the statement.
Wells Fargo & Co. last June was forced to settle a similar complaint filed against it by the alliance for $42 million, although it denied the allegations in settling the suit.