Politics & Government
Wells Fargo to Settle with Local Borrowers
Wells-Fargo Bank agreed to pay a $175 million settlement, including a payout to borrowers in the Bucks and Montgomery area, for what the government calls unfair lending practices.
Up to 1,030 borrowers in the Bucks and Montgomery area could collect a portion of the $175 million settlement the Department of Justice worked out with over allegations the bank discriminated against African-American and Hispanic borrowers.
The DOJ on Thursday released the details of the proposed settlement for what the government called “a pattern of discrimination” against qualified African-American and Hispanic borrowers in the bank’s mortgage lending from 2004 to 2009.
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According to the complaint, “Wells Fargo discriminated by steering approximately 4,000 African-American and Hispanic wholesale borrowers, as well as additional retail borrowers, into subprime mortgages when non-Hispanic white borrowers with similar credit profiles received prime loans. All the borrowers who were allegedly discriminated against were qualified for Wells Fargo mortgage loans according to Well Fargo’s own underwriting criteria.”
Of that group, 1,030 borrowers live in the Philadelphia Metropolitan Area, which includes Montgomery and Bucks counties. That group could receive more than $2 million in damages. Plus, as part of the settlement, Wells Fargo would institute a borrower’s assistance program that makes qualified homebuyers eligible to receive $15,000 in down payment assistance, closing costs or under certain conditions, home repair financing.
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“Wells Fargo is settling this matter because we believe it is in the best interest of our team members, customers, communities and investors to avoid a long and costly legal fight, and to instead devote our resources to continuing to contribute to the country’s housing recovery,” said Mike Heid, president of Wells Fargo Home Mortgage, in a statement.
The settlement is still subject to court approval.
Individuals who believe that they may have been victims of lending discrimination by Wells Fargo and have questions about the settlement may email the department at wellsfargo.settlement@usdoj.gov.
A copy of the complaint and the proposed settlement are attached.
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