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Deutsche Bank, Loan Servicers Sued For Decrepit Properties In Communities Of Color

Enterprise Florida

A national advocacy group Thursday filed suit in federal district court in Chicago, Illinois, alleging race-based housing discrimination against Deutsche Bank and two other companies.

The German-based bank has its second largest U.S. office in Jacksonville.

TheNational Fair Housing Alliance alleges the bank let foreclosed properties languish in minority neighborhoods, while keeping others in white areas up to code.

The president of the advocacy group, Shanna Smith, said bank-owned homes the group identified drove down property values in communities of color.

“So in 2009 we decided to look at the foreclosure crisis from the perspective from the banks now owning thousands and thousands of homes across the United States and asking ‘are they taking care of homes in African-American and Latino communities the same way they’re taking care of them in white communities?” She said.

Smith said in 30 metropolitan areas, her team photographed homes with graffiti, broken windows, overgrown grass and unsecured doors, among other poor conditions. Jacksonville was not probed, but the group found problems in Palm Beach, Miami and Tampa.

Deutsche Bank, which employs nearly 2,000 people in Jacksonville, declined to comment on the suit, but in a similar legal battle with the city of Los Angeles, the bank argued it is a trustee of pools of home loans and does not technically own the properties.

Smith said that argument is built on a foundation of sand.

“The Fair Housing Act is very clear,” she said. “It says trustees are liable and considered owners of the property and when you look at the property records for Deutsche, it says ‘Deutsche Bank, owner of record — trustee.’”

Deutsche Bank settled the Los Angeles lawsuit for $10 million without admitting fault and recouped most costs from its loan servicers. Ocwen Financial is one of them.

Banks like Deutsche have claimed in previous blight cases those servicers are responsible for not maintaining properties they manage for the banks and that’s why Smith’s group has included Ocwen, along with another servicer — Altisource, in the suit.

In a statement to WJCT, an Ocwen Financial spokesman strongly denied the charges and said  that the company would vigorously defend itself against these allegations.

“Ocwen cares about communities, and is committed to equal maintenance and marketing of bank-owned homes no matter where they are located in the U.S.  We believe we have in place the necessary quality control standards designed to ensure that all properties are handled consistently regardless of their location,” spokesman John Lovallo wrote. “NFHA has previously made these same allegations against numerous other institutions in other complaints.”

Duetsche Bank is not the only bank to recently settle over similar allegations.The Los Angeles Times reported last September that U.S. Bank, in combination with its servicers, paid $13.5 million to the city of Los Angeles for not keeping homes up to date.

Ryan Benk can be reached at, 904-358-6319 or on Twitter at @RyanMichaelBenk.

Ryan Benk is a former WJCT News reporter who joined the station in 2015 after working as a news researcher and reporter for NPR affiliate WFSU in Tallahassee.