Philadelphia Mayor Jim KenneyPhiladelphia Mayor Jim Kenney

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PHILADELPHIA—The City of Philadelphia and mortgage lender WellsFargo have announced an agreement to settle a 2017 fair housinglawsuit.

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In connection with the agreement, Wells Fargo has agreed to pay$10 million to fund sustainable housing-related programs to promoteand preserve home ownership for low- and moderate-income residents.In the settlement agreement, Wells Fargo does not admit liabilityand throughout the litigation process vigorously denied theallegations.

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The lawsuit filed by the City of Philadelphia in 2017 allegedthat Wells Fargo originated residential mortgage loans to minorityborrowers in Philadelphia in violation of the Fair Housing Act,causing economic and non-economic damages to the city.

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The largest portion of the Wells Fargo funds—$8.5 million—willbe used to provide grants for down payment and closing costassistance to low- and moderate- income persons and householdspurchasing homes within the city. The Philadelphia HousingDevelopment Corporation will provide the grants through its currentprogram infrastructure. There is no requirement that the buyerreceive a home purchase loan from Wells Fargo in order to qualifyfor these grants.

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Another $1 million will be divided among up to three non-profitorganizations that implement the city's Residential MortgageForeclosure Prevention Program. The program was developed in thewake of the 2008 financial crisis as a way to mitigate the effectsof the foreclosure proceedings on homeowners, lenders and thecity.

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An additional $500,000 in grants will be available to the city'sland care program, aimed at revitalizing vacant land throughclean-up and greening efforts, such as cleaning and plantingvegetation on abandoned residential lots in Philadelphia.

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The city and Wells Fargo also note that they will collaborate toconduct a program entitled "Understanding Philadelphia" foremployees who work at Wells Fargo Home Mortgage in the Philadelphiacommunity, and will include city and PHDC officials and others. Theprogram will analyze the history of the housing market in the city,the city's diverse neighborhoods, and the current housing needs ofcity residents.

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"Home ownership brings stability, security and pride — inyourself, and in your community. Philadelphians who struggle amidpoverty need assurance that they face a level playing field as theywork to achieve that dream. This agreement brings substantialsupport to the very communities that most need this assistance,"Philadelphia Mayor Jim Kenney says. "Philadelphia is committed toensuring that no one faces additional hurdles toward home ownershipbecause of their race or ethnicity."

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Joe Kirk, Wells Fargo Region Bank President, GreaterPhiladelphia, says, "We're pleased that we've been able to resolvethis matter in a way that will provide real, tangible sustainablehomeownership opportunities for many low- and moderate-incomeresidents of Philadelphia. The efforts funded by these grants areconsistent with Wells Fargo's broader philanthropic strategy, whichincludes a $1 billion commitment over the next six years to addressthe U.S. housing affordability crisis."

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He adds that in the past 10 years Wells Fargo has been thelargest provider of home loans for low- and moderate-incomefamilies in Philadelphia.

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John Jordan

John Jordan is a veteran journalist with 36 years of print and digital media experience.