Fair Housing Center of West Michigan files discrimination claim

This month, The National Fair Housing Center Alliance, Metro Fair Housing Services Inc. of Atlanta and The Fair Housing Center of West Michigan filed a federal housing discrimination complaint against Asset Management Specialists (AMS). This administrative complaint was filed at the Department of Housing and Urban Development based on the claims that AMS is contracted by Fannie Mae to maintain real estate owned (REO) properties and did not maintain properties in African American and Latino communities.

The lawsuit is applicable to AMS properties located in Grand Rapids, San Diego and Atlanta. While currently a small list, the National Fair Housing Alliance is planning to investigate other cities that AMS services and add on any applicable properties in the next month. In addition to AMS, there are two other Fannie Mae contracters under investigation, for a total of 15 cities with alleged discrimination in upkeep practices.

Fannie Mae has been informed of the issues, but as of yet, has done nothing to improve the standards to which these homes are being mantained.

AMS is responsible for servicing eight aspects on any of its properties: accumulation of trash or debris, overgrown grass/leaves, overgrown or dead shrubbery, invasive plants covering 10% or more of the structure, unsecured or broken doors, unsecured or broken windows, unsecured holes in the structure and broken or missing steps and handrails on the property.

Of these eight tasks AMS was required to fulfill as dictated by Fannie May, there was a significant discrepancy between white neighborhoods and non-white, Latino and African American neighborhoods. The Fair Housing Center of West Michigan investigated 29 Fannie Mae owned real estate owned properties serviced by AMS in the metro Grand Rapids area, which is 100% of the properties mantained by AMS for Fannie Mae.

In 47% of the managed properties in white neighborhoods there were no deficiencies. Every property in the African American neighborhoods had deficiencies. 50% of the properties in African American neighbborhoods had three or more deficiencies. Only two of the properties in white neighborhoods had 3-4 deficiencies. No properties in a white neighborhood had five or more deficiencies. 20% of the ones in African American neighborhoods had five or more deficiencies.

“The differing maintenance of REO properties based on racial or ethnic composition of neighborhoods is a violation of the Fair Housing Act,” says Stephen Dane, attorney at Relman Dane & Colfax. He adds too that while the complaint is currently directed solely at AMS, Fannie Mae could be liable due to traditional rules of vicarious liability.

“Fannie Mae and AMS have clearly fallen short of their responsibility to be good neighbors,” says Shanna L. Smith, President and CEO of the National Fair Housing Alliance. "Failing to maintain homes based on the racial or ethnic composition of a neighborhood is a violation of the federal Fair Housing Act and has a toxic effect on the health and livelihood of entire communities."

"In addition to blight, substandard maintenance creates a host of problems for the surrounding community. As property values fall, so does tax revenue for local governments," Smith adds. "Money for schools, parks, recreation facilities and redevelopment dwindles as homeowners watch poorly maintained REOs drag their home values down."

Any funds received in restitution will be used to stabilize neighborhoods affected by this complaint and in other areas of West Michigan.

“We want to [invest the money to] enable neighborhood stabilization groups to expand their efforts,” says Nancy Hayes, Director of Fair Housing.

Some projects being considered for investment by the Fair Housing Center of West Michigan include a dedicated green space in the 49507 area and safe walking paths to community schools and businesses.

Asset Management Specialists deny any issues with the property. They released the following statement in regards to the complaint filed with HUD.

"Asset Management Specialists, Inc. proudly provides REO property maintenance services for our clients across the country. Both our clients and our own corporate ethics require that we service properties without regard to their location or the racial and ethnic makeup of any neighborhood. We continue to adhere to those high standards in all we do, and have done so since our founding in 1994.

Before the filing of this complaint, NFHA had never contacted us to discuss the issues raised by their internal investigation. We would have welcomed the opportunity to have addressed their concerns earlier.

 Not only does our company regularly inspect the work we provide to properties under our care, but many of our clients also require outside, independent inspectors to spot check their properties we maintain. The results of those inspections have revealed no issues such as those described by the National Fair Housing Alliance.

 Nevertheless, we take this complaint seriously and will work with the NFHA and the other organizations to respond to any concerns they may have."