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Largest property preservation firm in U.S. charged with discrimination

22nd April 2014   ·   0 Comments

By Mason Harrison
Contributing Writer

The National Fair Housing Alliance filed a racial discrimination complaint April 8 against the largest property preservation firm in the country, following an investigation by the Greater New Orleans Fair Housing Action Center of alleged biased marketing, the maintenance practices of foreclosed homes in Black communities in the New Orleans area and parts of the Baton Rouge region. The complaint comes a year after the housing alliance filed a previous complaint against Safeguard Properties with the U.S. Department of Housing and Urban Development over similar concerns.

Safeguard Properties is accused of poor upkeep and maintenance of real estate-owned homes in Black neighborhoods across the country, with 78 percent of foreclosed homes in Black neighborhoods in New Orleans serviced by Safeguard showing signs of trash accumulation, compared to 12 percent of homes in white neighborhoods showing the same deficiencies, according to the housing action center. In Baton Rouge, every property the group examined in Black neighborhoods had overgrown grass and leaves, with half sporting trash accumulation. None of the foreclosed homes in white areas serviced by Safeguard in Baton Rouge were poorly maintained.

“The problem with this sort of housing discrimination is that it has a damaging effect on the property values in minority communities,” says Morgan Williams, a New Orleans native and the director of enforcement and investigations for the Washington, D.C.-based fair housing alliance. “Discriminatory maintenance and marketing has been an increasing problem since 2009, when the housing bubble really started to burst. We look at everything from curb appeal to whether or not people are placing for-sale signs in minority communities compared to white communities.”

Safeguard, however, vigorously defends its record of providing preservation services for foreclosed homes on behalf of national housing lender Fannie Mae. The Ohio-based firm, in a statement countering the discrimination allegations, contends it “neither condones nor tolerates acts of racism or business practices that would unfairly target or neglect certain neighborhoods based on location and demographics. We are outraged by the allegations made by the NFHA and we intend to dispute the claims and prove the accusations to be untrue. We take complaints of this nature very seriously. Safeguard has a proven record of working with our clients, communities, and civic leaders throughout the country to combat blight brought on by the housing crisis.”

Safeguard is also facing charges that it falsified data presented to Fannie Mae connected to the upkeep of foreclosed properties, including altered photographs. The firm was named in a report by the Federal Housing Finance Agency’s Office of the Inspector General as one of several preservation firms accused of misleading federal lenders about the maintenance of particular properties. But Safeguard has stressed its willingness to work to address any perceived deficiencies in caring for foreclosed properties. “We have asked NFHA for details on the actual properties they base their complaints on,” according to the statement, “and they have not cooperated with us. Safeguard has and will continue to cooperate with HUD’s investigation of this matter.”

A spokesperson for HUD says the matter will now make its way through the administrative process. “In any complaint, the parties against which the complaint is filed have the right to file an answer. HUD’s office of Fair Housing and Equal Opportunity conducts an impartial investigation of the complainant’s allegations and of the respondent’s explanations for its actions, using interviews of the parties and review of relevant documents. Based on the findings of the investigation, and the applicable law, the office of Fair Housing and Equal Opportunity makes a finding of whether or not there is reasonable cause to believe that discrimination has occurred.” The outcome of the investigation could yield legal action or settlement through an administrative law judge.

In New Orleans, the fair housing action center probed 44 Fannie Mae homes serviced by Safeguard, with 26 in Black neighborhoods; 17 in white communities; and a single home in a majority non-white area. Most of the homes with three or more deficiencies are scattered throughout New Orleans East and Algiers, both areas are communities with majority-Black populations. In Baton Rouge, the fair housing action center examined 10 homes serviced by Safeguard. Six are located in white neighborhoods, while four are located in Black neighborhoods. Each of the four homes in Black sections of Baton Rouge possessed three to five deficiencies.

“You might assume that you’ve got a great neighbor in a company with a name like Safeguard,” says James Perry, who heads the fair housing action center and led the Louisiana probe of Safeguard. “But in southeast Louisiana, we have found that having this company as your neighbor means you actually need to keep your guard up. We have been fighting blight for years, but we never expected that neighborhoods of color would have to confront Safeguard for un-neighborly, value-depreciating antics like these. We are simply calling on Safeguard to step-up and play fair in all neighborhoods in New Orleans and Baton Rouge regardless of their racial make-up.”

This article originally published in the April 21, 2014 print edition of The Louisiana Weekly newspaper.

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