Wells Fargo to Pay $10M to Settle Philadelphia Fair Housing Suit
In its settlement agreement, Wells Fargo does not admit liability and throughout the litigation process vigorously denied the allegations.
PHILADELPHIA—The City of Philadelphia and mortgage lender Wells Fargo have announced an agreement to settle a 2017 fair housing lawsuit.
In connection with the agreement, Wells Fargo has agreed to pay $10 million to fund sustainable housing-related programs to promote and preserve home ownership for low- and moderate-income residents. In the settlement agreement, Wells Fargo does not admit liability and throughout the litigation process vigorously denied the allegations.
The lawsuit filed by the City of Philadelphia in 2017 alleged that Wells Fargo originated residential mortgage loans to minority borrowers in Philadelphia in violation of the Fair Housing Act, causing economic and non-economic damages to the city.
The largest portion of the Wells Fargo funds—$8.5 million—will be used to provide grants for down payment and closing cost assistance to low- and moderate- income persons and households purchasing homes within the city. The Philadelphia Housing Development Corporation will provide the grants through its current program infrastructure. There is no requirement that the buyer receive a home purchase loan from Wells Fargo in order to qualify for these grants.
Another $1 million will be divided among up to three non-profit organizations that implement the city’s Residential Mortgage Foreclosure Prevention Program. The program was developed in the wake of the 2008 financial crisis as a way to mitigate the effects of the foreclosure proceedings on homeowners, lenders and the city.
An additional $500,000 in grants will be available to the city’s land care program, aimed at revitalizing vacant land through clean-up and greening efforts, such as cleaning and planting vegetation on abandoned residential lots in Philadelphia.
The city and Wells Fargo also note that they will collaborate to conduct a program entitled “Understanding Philadelphia” for employees who work at Wells Fargo Home Mortgage in the Philadelphia community, and will include city and PHDC officials and others. The program will analyze the history of the housing market in the city, the city’s diverse neighborhoods, and the current housing needs of city residents.
“Home ownership brings stability, security and pride — in yourself, and in your community. Philadelphians who struggle amid poverty need assurance that they face a level playing field as they work to achieve that dream. This agreement brings substantial support to the very communities that most need this assistance,” Philadelphia Mayor Jim Kenney says. “Philadelphia is committed to ensuring that no one faces additional hurdles toward home ownership because of their race or ethnicity.”
Joe Kirk, Wells Fargo Region Bank President, Greater Philadelphia, says, “We’re pleased that we’ve been able to resolve this matter in a way that will provide real, tangible sustainable homeownership opportunities for many low- and moderate-income residents of Philadelphia. The efforts funded by these grants are consistent with Wells Fargo’s broader philanthropic strategy, which includes a $1 billion commitment over the next six years to address the U.S. housing affordability crisis.”
He adds that in the past 10 years Wells Fargo has been the largest provider of home loans for low- and moderate-income families in Philadelphia.