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Cyprexx Responds to Discrimination Complaint

This week, Cyprexx Services became the latest company to come under fire from the National Fair Housing Alliance (NFHA).

The group announced on Tuesday that they would be filing a complaint with the Department of Housing and Urban Development, accusing Cyprexx, a company contracted with Fannie Mae to clean and preserve properties, of deliberately discriminating against people of color by neglecting properties in minority neighborhoods located in Baltimore, Maryland; Kansas City, Missouri; Orlando, Florida; and Richmond, Virginia.

“Cyprexx is required by federal law to maintain foreclosures without regard to the racial makeup of the neighborhood, but the evidence we uncovered flies in the face of that obligation” said NFHA President Shanna Smith.

The group consists is a consortium of housing policy advocacy groups focused on advocating for equal housing policy with a special focus on housing discrimination.

For its part, Cyprexx responded directly to DSNews regarding the complaint, stating unequivocally that the allegations were “frivolous and without reasonable merit” and lamenting the fact that NFHA did not contact them directly in order to address the group’s concerns.

“While the NFHA has a key role in this country in ensuring Fair Housing Laws are enforced, one would hope this does not give them clearance to make unfounded allegations and we fully expect that an investigation will find no basis for these claims against Cyprexx," the company said in a statement.

Filing complaints against Fannie Mae contractors has become somewhat of cottage industry for NFHA as it pursues what it describes as the “failure of Fannie Mae’s field service vendors to properly maintain vacant foreclosures in neighborhoods of color nationwide.” NFHA has also filed similar complaints in the way foreclosed homes are maintained and marketed against Bank of America, Deutsche Bank, and US Bank.

Just this past April, Safeguard Properties, the largest mortgage field services provider in the nation and another contractor of Fannie Mae, was hit with a similar complaint from NFHA alleging discrimination. The complaint was based on an extremely small sample size.

Likewise, the complaint filed Tuesday surveyed only 175 homes spread out over four cities. Cyprexx has demanded that NFHA turn over the metrics and data for which they based their allegations.

The company argues that discrimination on its part is actually impossible because the company has no demographic information involving the racial makeup of the neighborhoods that they serve.

“Cyprexx receives assignments from our clients with no information regarding neighborhood demographics,” Cyprexx said. “Our clients have uniform standards to which all properties must be cleaned and preserved. We assign our vendors and instruct them according to the same set of standards."

“After servicing, properties are frequently inspected by Cyprexx and our clients as well as by third party inspectors. The properties inspected are selected randomly without regard to the neighborhood demographics.”

The firm concluded: “We believe any responsible agency that will take the time to objectively analyze the facts regarding how Cyprexx handles assignments from our clients, will come to the conclusion that the NFHA is factually incorrect in their complaint.”

About Author: Derek Templeton

Derek Templeton is an attorney based in Dallas, Texas. He practices in the areas of real estate, financial services, and general corporate transactional law. His experience includes time as an Attorney Adviser for the U.S. Small Business Administration and as General Counsel for a nonprofit organization in Dallas. A self-avowed "policy junkie," he has a keen interest in the effect that evolving federal policy has on the mortgage, default servicing, and greater housing industries.

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