GRAND RAPIDS, Mich. — A West Michigan non-profit organization is part of a $53 million settlement with Fannie Mae after a federal court found the mortgage loan company wasn't taking care of foreclosed homes properly in the area.
The Fair Housing Center of West Michigan was one of about 20 housing groups across the country involved in this case. With this settlement, about $1.2 million will go towards housing projects in West Michigan.
About 10 years ago, members of the organization walked the streets of the southeast side of Grand Rapids. It was part of an effort to one day give back to the community.
"We were part of a national investigation looking at how properties were maintained in minority zip codes as compared to white zip codes after the 2008 housing crisis," Executive Director Nancy Haynes says.
The Center found that out of more than 30 homes in Fannie Mae's portfolio, those in the 49507 zip code were twice as likely to have five or more deficiencies than in the 49504 zip code.
"We looked at whether or not the properties were marketed with for sale signs. We looked at whether or not the lawns were mowed, whether or not the trash was picked up, whether or not broken windows were secured, whether or not there were holes in the siding," Haynes says.
Homes involved in the lawsuit against Fannie Mae
The center's investigation wrapped in 2014, and made its way through the Northern District of California, where housing centers from dozens of other centers also filed. Just this week, the multi-million dollar settlement was reached.
"It's groundbreaking in that this is the first time that a court, a Federal Court has held that the Fair Housing Act applies to the maintenance and marketing of real estate owned properties," she says.
More than $1.2 million will be dedicated to fair housing in West Michigan, with half of that going to Grand Rapids and the other half in Muskegon.
"We want to listen to the neighbors who live in these affected neighborhoods, to find out what their priorities are and where the gaps are," Haynes says.
That includes creating grants for down payment assistance for first-generation homebuyers and renovations for foreclosed homes in disrepair.
"We're just so excited to be able to have the resources to try to help the neighborhoods that are the hardest impacted by these discriminatory policies," she says.
The Fair Housing Center of West Michigan has 30 months to delegate these funds, and they look forward to partnering with local non-profit organizations to create a plan.
A spokesperson with Fannie Mae issued a statement, saying:
"This settlement resolves legacy allegations regarding Real Estate Owned (REO) maintenance and allows Fannie Mae and the National Fair Housing Alliance to move forward and work together on important housing equity issues. Fannie Mae takes the maintenance of all its properties very seriously. We require the same property maintenance standards in all neighborhoods regardless of race or ethnic background, and conduct independent third-party quality control reviews of vendors hired to do this work. Our REO maintenance standards are designed to ensure that all properties are tended to and treated equally. Over the years we have continuously enhanced our REO maintenance practices in the ordinary course of business, including the adoption of mobile technology to enhance the quality control and efficiency of property inspections; enhanced guidance to field service vendors of our expectations, including fair housing compliance; use of clear boarding nationally; and expanded and diversified our network of field service vendors. Through these actions we have demonstrated our continued dedication to providing quality care to all communities. We remain firmly committed to continuing to provide this high level of attention to our REO properties as a central part of our mission to facilitate equitable and sustainable access to homeownership and rental housing across the country.”
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