The National Fair Housing Alliance (NFHA) has leveraged faulty data and close ties to the Department of Housing and Urban Development (HUD) to squeeze cash from banks for allegedly discriminatory practices involving the maintenance of foreclosed homes in minority neighborhoods, according to American Banker.

Despite banks’ request for more information on their investigation, the NFHA has released the addresses of only a small fraction of properties that it claims they unfairly neglected, according to American Banker.

The trade publication also reports that the NFHA misidentified the banks legally responsible for maintaining some of the addresses that the NFHA did release, and in some cases, faulted banks for damage to homes that already existed before their repossession.

American Banker also highlighted a HUD official’s close ties the NFHA that one expert said might pose a conflict of interest. The HUD official, who is responsible for overseeing cases involving discrimination, is a former NFHA employee and consultant.

The complaints that the NFHA has filed with HUD have so far resulted in a $42 million payout by Wells Fargo. The organization continues to pursue cases against Bank of America and U.S. Bank alleging similar discriminatory practices.

Source: American Banker

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