This systemic housing discrimination case against the Federal National Mortgage Association (Fannie Mae) challenges Fannie Mae’s discriminatory maintenance of its “real estate owned” (REO) properties around the country.
The lawsuit, filed in 2016 in the U.S. District Court for the Northern District of California, was brought on behalf of the National Fair Housing Alliance and twenty local fair housing organizations. The lawsuit alleges that Fannie Mae did not conduct routine maintenance and marketing of its REO properties in predominantly African-American and Latino neighborhoods, but did maintain and market its REO properties in predominantly white neighborhoods.
As alleged in the complaint, after conducting a lengthy nationwide investigation of over 2,300 Fannie Mae REO properties, the plaintiff fair housing organizations informed Fannie Mae of the details of their findings, but Fannie Mae refused to change its behavior. Fannie Mae’s actions, the complaint alleges, have had a significant harmful impact on neighborhoods of color throughout the country, threatening the residents' health and safety and diminishing surrounding property values. A presentation describing NFHA's investigation methodology and findings is available here.
Since the lawsuit was filed, Fannie Mae has made two attempts to dismiss the claims against it; both have failed. In March 2018, the court upheld plaintiffs’ claims for liability based on a disparate impact theory and granted leave to amend the complaint to include additional allegations of discriminatory intent. In August 2019, the court held that plaintiffs’ allegations, if proven true, make out a claim that Fannie Mae engaged in intentional discrimination with respect to its REO maintenance, and affirmed plaintiffs’ rights to secure attorneys’ fees and injunctive relief under the Fair Housing Act.