Racial bias at work?
The National Fair Housing Alliance in Washington in a 2012 report, The Banks Are Back – Our Neighborhoods Are Not, says vacant and poorly maintained bank-owned properties are a national crisis.
Further, the advocacy group says, banks are taking care of properties in wealthier, whiter neighborhoods, while those in predominantly poor and minority neighborhoods are falling apart, dragging down areas that were already struggling.
While (bank-owned) properties in predominantly white neighborhoods were more likely to have manicured lawns, securely locked doors, and attractive for sale signs out front, homes in communities of color were more likely to have overgrown yards littered with trash, unsecured doors, broken windows, and indications of marketing as a distressed sale, the report said.
(Bank-owned) properties in communities of color generally appeared vacant, abandoned, blighted and unappealing to real estate agents who might market the unit to homebuyers. On the other hand, (bank-owned properties) in white communities generally appeared inhabited, well-maintained and attractive to real estate agents and homebuyers.
That report, released in April, followed 2011s Here Comes The Bank, There Goes Our Neighborhood, which found similar problems.
An Indiana Bankers Association spokeswoman declined to comment, saying it would not be appropriate for a state organization to comment on a speculative national report.
In northeast Indiana, according to UPSTAR figures, 75 percent of the bank-owned homes for sale were listed with values less than $75,000.
Joyner said some of the worst homes are those where the bank, after foreclosure, has simply abandoned the house. Officials say banks figure it wont be worth it to maintain and try to sell the house in a depressed housing market.
A lot of these foreclosures are occurring from the national banks, Joyner said. Theyve got huge portfolios of these properties across the country – a lot of them, I think, dont even recognize that they own it.
Thats where the citys new ordinance attaching fines to the property has helped, Joyner said. Because the fines will have to be paid when the property is sold, it cuts into the banks profit. Suddenly, Joyner said, banks are being more cooperative trying to fix up dilapidated properties, which is really what everybody wants.