Miami Herald Interviews HOPE VP Daniel Howe Concerning Recent Lawsuit

Douglas Allen has lived in the same three-bedroom home in a quiet West Kendall suburb for 23 years. When the late-night parties at the vacant house next door started, he called police.

“We could smell marijuana and hear noises and loud music,” said Allen, 74. “The police would come and shut the parties down and everyone went home. But then a week or two later, it would happen again.”

Allen says the revelers were able to get into the property because the front doors weren’t locked and some of the windows had been smashed. So he called the county commissioner’s office in Kendall to complain. A few days later, the broken panes were boarded up. A digital turnkey lock used by Realtors was placed on the front door. A new gate barring access to the rear of the property was installed.

But the house, which is currently listed for auction on the real estate website, remains vacant. The front lawn is rocky and unkempt. Chunks of exterior molding are missing. The wooden front door is cracked and rotted.

According to Miami-Dade public records, Deutsche Bank and Ocwen Financial acquired the home in foreclosure for $232,800 in Feb. 2017. The previous owner purchased the house in November 2006 — just before the financial recession and housing crash — for $380,000.

Deutsche, Ocwen and the real estate management firm Altisource are the targets of an expanded complaint alleging racial discrimination filed by the National Fair Housing Alliance (NFHA). The complaint, originally filed in 2014 with the Department of Housing and Urban Development, was amended this week. It charges that the companies failed to keep up bank-owned homes in African-American and Hispanic neighborhoods in 30 U.S. metro areas, including Miami-Fort Lauderdale, with the same routine maintenance they provided properties in predominantly white neighborhoods.

NFHA, a Washington, D.C.-based nonprofit advocate for equal housing opportunities, claims Deutsche, Ocwen and Altisource failed to clear garbage and debris from the targeted homes, which were foreclosed after the housing crash in 2008; lawns and shrubbery were not maintained; broken windows and doors were not repaired; graffiti, water damage and peeling paint were left unchecked.

Aftermath of the housing crisis

“A lot of the former owners of these homes were victims of predatory lending,” said Shanna Smith, president and CEO of NFHA. “People were given loans with exploding ARMs, so after a year or two their payments doubled or tripled and they lost their homes. Other people had medical issues or divorces.”

Whatever the reason for the foreclosure, Smith said, Deutsche, Ocwen and Altisource failed to properly maintain and market the homes, which negatively impacted the surrounding neighbors. Uncollected trash attracted rats, mice and other pests. Cities were forced to expend police, fire protection and nuisance abatement staff to cite the homes.

Deutsche Bank did not reply to requests for a comment for this article.

In a statement to the Herald, Altisource claimed the assertions by NFHA “have no merit,” citing HUD’s dismissal in 2016 of similar charges of racial discrimination the organization brought against Minneapolis-based U.S. Bank.

“Altisource is a property preservation vendor operating on behalf of institutions that service mortgages and foreclosed homes. The NFHA assertions misrepresent both Altisource’s conduct and our role as a property preservation vendor. Altisource is committed to the principles of fair housing and neighborhood stabilization. We provide services according to client-approved policies and processes, applied without regard to the racial composition of a neighborhood and supported by industry best practices of quality assurance. We believe NFHA is acting irresponsibly and using misleading and inaccurate information.”

“We have not yet seen the formal complaint,” said John Lovallo, a spokesperson for Ocwen, via e-mail. “However, based on previous discussions with the NFHA, we strongly deny the allegations and believe they lack evidence and have no merit. The company will vigorously defend itself against these allegations.”

NFHA has previously accused Wells Fargo, Bank of America and the mortgage titan Fannie Mae of similar negligence. Wells Fargo settled its complaint in 2013 by paying $42 millionto promote homeownership and neighborhood stabilization.

“We’re not saying Deutsche has to put on a new roof or kitchen into these properties,” said Smith, adding that NFHA plans to file a lawsuit later this year. “What we really are focusing on here is simple maintenance. Because they haven’t been maintained, a lot of these properties end up as investor homes, which changes the demographics of a neighborhood. Your interest rates are higher when you try to refinance your home. This hurts the tax base and the people living in these communities. You might lose your homeowner’s insurance because assessors see these properties and assess them as high risks. Your property appraisal is going to go down.”

Relying on the help of housing organizations and civil rights groups around the U.S., NFHA systematically gathered photographic evidence against Deutsche, releasing detailed reports for each of the 30 cities cited in the complaint.

In South Florida, the nonprofit Housing Opportunities Project for Excellence (HOPE) visited 63 Deutsche Bank-owned homes in the Miami-Fort Lauderdale area from Jan. 2012 to Jan. 2016. Its detailed report found that 74.5 percent of the homes in neighborhoods of color had substantial amounts of trash on the premises; 55.3 percent of the homes had broken or boarded windows, and 40.4 percent of the homes had a damaged fence.


Daniel Howe, vice president and fair lending initiative director of HOPE

“The 60 thousand-dollar question is why neglect these properties?” said Daniel Howe, vice president and fair lending initiative director of HOPE. “That’s what mystifies us in the fair housing world. Everybody’s money is green. It goes beyond logic why you wouldn’t make every effort to try to sell every property you have available to sell.”

Housing experts say one of the reasons is that after the 2008 housing crash and recession, banks and mortgage lenders were overwhelmed by the sheer number of properties they suddenly needed to unload.

“Banks were in a new situation they had not been in before,” said Kenneth Thomas, president of the Community Development Fund Advisors. “A bank wants to turn a property as quickly as possible. In a lot of these cases, they’re going to go for the low-hanging fruit: Find those properties that will sell the quickest and easiest, and maintain those to get them sold. The houses in the good neighborhoods are going to get more attention because they have a greater likelihood of selling quickly.”

Despite the lack of attention, many of the homes in HOPE’s report have sold since the time the organization visited them. The group won’t release the exact addresses of the houses in their report, citing privacy concerns for the current tenants of the properties. But two of the homes Howe claims were in the worst shape in Miami-Dade County — both of them located in Hialeah — have since been sold and refurbished by their owners with new doors, windows, paint and other improvements.

But the situation persists. Even though the home in West Kendall was not a part of the HOPE list, it is representative of many of the concerns cited by NFHA. On a recent weekday morning, Evelyne Charles-Pierre, 66, drove by the property after seeing it listed online.

But after seeing the current condition of the house, she and her husband quickly decided it wasn’t for them.

“We’ve been looking but can’t find anything within our price range,” she said. “We’d have to spend so much money fixing up this place, we’d be better off buying a new home.”

~By Rene Rodriguez, for the Miami Herald