Fannie Mae has settled a lawsuit…

The Federal National Mortgage Association, aka Fannie Mae, has settled a lawsuit brought by housing-rights activists accusing the agency of racial discrimination in foreclosure practices, including charges of maintaining houses foreclosed in white neighborhoods while neglecting homes in low-income areas.

The government will dish out $53 million to minority homeowners and other homeowners in 39 U.S. metropolitan areas.

The San Francisco Chronicle reported on the settlement, which will direct money to two Bay Area communities:

The agreement resolves a lawsuit filed in Oakland in 2016 accusing the Federal National Mortgage Association, or Fannie Mae, of racial discrimination in its foreclosure practices: providing maintenance to homes on which it had foreclosed in largely white areas, while allowing foreclosed homes in communities of color to deteriorate, harming their neighborhoods and future residents.

The settlement does not include any admission of wrongdoing but requires the agency to assist residents in the affected districts. According to Fair Housing Advocates of Northern California, more than $35 million will be used nationwide to promote home ownership, renovate housing and provide assistance with credit and down payments.

Of those funds, $755,000 will go to each of the the two Bay Area districts for neighborhood rehabilitation, and additional sums will be available for fair-housing services, said the group’s executive director, Caroline Peattie. She said the suit followed a four-year investigation of more than 2,300 foreclosed homes owned by Fannie Mae, including 68 in Vallejo and nearby Solano County neighborhoods and 88 in Oakland and Richmond.

According to the suit, more than 39 percent of foreclosed homes in black and Latino neighborhoods had trash on foreclosed properties, 25 percent had broken doors, and 41 percent were damaged or boarded up.

Fannie Mae tried to have the lawsuit dismissed but U.S. District Judge Jeffrey White ruled in 2019 that the housing-rights groups could try to prove that Fannie Mae violated fair-housing laws by not changing its practices after it was notified of the investigation and its findings. 

“The groups said it was the first federal court ruling to conclude that housing-discrimination laws applied to foreclosed properties owned by the agency,” the Chronicle reported.

“We poured a lot of time and effort into investigating the differences between the marketing and maintenance of foreclosed homes in communities of color compared to white communities, because we knew how big an impact this can have on the health and well-being – financial and otherwise – of neighborhoods with foreclosed properties,” Peattie said in a statement. “We are excited that Fannie Mae has made the commitments it has in this settlement.”

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