Wells Fargo Has Settled Complaint on Foreclosures

June 7, 2013
Washington Post 
mortgage lending news

Following a lengthy probe by the National Fair Housing Alliance, Wells Fargo has agreed to settle claims that it failed to properly maintain and market foreclosed homes in minority neighborhoods. The advocacy group said the bank ignored upkeep on properties in black and Latino communities, which also were less likely to display for-sale signs than foreclosures in white neighborhoods. While Wells did not admit to the allegations, it pledged to spend at least $42 million to end NFHA's complaint with HUD. Nonprofits that promote homeownership, neighborhood stabilization, and property rehabilitation will receive $27 million; while $11.5 million will go toward HUD's efforts in 25 other cities. Another $550,000 will go to NFHA to host foreclosure-prevention seminars and a pair of conferences on fair-housing law. The settlement additionally gives priority in the bidding process to Wells Fargo borrowers who plan to live in a property after buying it, rather than to investors. Wells also will develop a fair housing training program for both its own staffers and real estate agents who sell foreclosed homes. "Many neighborhoods across the country have been seriously damaged by the foreclosure crisis," according to NFHA President and CEO Shanna Smith. The settlement "will help lay the foundation for the industry to get some of those neighborhoods back on their feet."
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