PHOENIX - A national advocacy group filed a federal housing-discrimination complaint this week accusing Bank of America Corp. of treating foreclosed homes poorly in minority neighborhoods.
The National Fair Housing Alliance said research in Phoenix and seven other metropolitan areas showed that the lender poorly maintains and markets bank-owned properties in areas with predominantly Latino and black populations. Homes in predominantly white neighborhoods are given superior treatment, it alleged.
The group examined 375 foreclosed homes in the cities. Its assessment of Phoenix was based on eight properties, seven of them in predominantly Latino neighborhoods.
Shanna L. Smith, president and CEO of the Washington, D.C.-based organization, described it as "the tale of two recoveries."
"We've found significant racial disparities," Smith said in a conference call.
Those disparities mean that Bank of America has violated and continues to violate the Fair Housing Act, according to the claim filed with the U.S. Department of Housing and Urban Development.
The other metropolitan areas studied were: Atlanta; Dallas; Dayton, Ohio; Grand Rapids, Mich.; Miami-Fort Lauderdale in Florida; Oakland-Richmond-Concord in California; Philadelphia; and Washington, D.C.
The complaint said each of the Phoenix-area homes in minority neighborhoods had maintenance deficiencies such as trash, dead grass, broken or boarded windows, damaged fences and peeling paint, or marketing deficiencies such as warning or "no trespassing" signs.
The group said the Phoenix home in a predominantly white neighborhood was kept in good condition, including a well-maintained lawn and pool.
A spokeswoman for New York-based Bank of America emailed a statement denying the group's claims.
"Bank of America is committed to stabilizing and revitalizing communities that have been impacted by the economic downturn, foreclosures and property abandonment," the statement said.
While there were previously many more foreclosed homes owned by Bank of America in Phoenix, most of those left unmaintained were eventually sold at auctions, Smith said.
"And things that are sold at auctions rarely go to an owner-occupant," Smith said. "Those auctions now are being picked up by private equity firms that are funded by foreign investors."
Peter Romer-Friedman, counsel to the National Fair Housing Alliance and several other housing-rights groups participating in this week's conference call, said discrimination in the bank's handling of foreclosed homes robs communities of wealth.
"It has an enormously harmful and far-reaching impact," Romer-Friedman said. "It discourages potential purchasers from buying homes in communities of color. It restricts the housing choices in communities of color and leaves purchasers of properties in these communities struggling to remediate problems caused by months or years of neglect."
Ed Valenzuela, executive director of the Arizona Fair Housing Center, said Bank of America has blatantly ignored issues cited by the group.
"They can see the problem as well as anyone walking by," he said.