Wells Fargo axes brokers, pays home loan claims (Update)
$2 million to 1,000+ Philadelphia homebuyers "steered" to high-cost loans.
Wells Fargo axes brokers, pays home loan claims (Update)
Joseph N. DiStefano
WHO GETS Wells Fargo home-loan discrimination settlement cash? "The Department of Justice will identify individuals for compensation within 45 days and then a settlement administrator will make best efforts to contact these individuals within six months," says the bank.
EARLIER: Wells Fargo Bank, the largest U.S. home mortgage lender, has agreed to pay $175 million to black and Latino borrowers who were overcharged for home loans from 2004 to 2009 when Wells or its predecessors "steered" them into high-interest-rate "subprime" mortgages even though their credit records showed they should have qualified for lower-rate standard mortgages.
"Wells Fargo will also provide $50 million in direct down payment assistance" in neighborhoods "that were hard hit by the housing crisis" and where many borrowers suffered loan "discrimination," says the Justice Department in a statement. In the Philadelphia area, where Wells Fargo is the dominant bank, "at least 1,030 victims" could potentially "receive more than $2 million in damages" and some homebuyers could quailfy for up to $15,000 in downpayment assistance, Justice spokeswoman Patricia Hartmann told me.
Wells Fargo adds that the U.S. claims (including complaints by Pennsylvania, Illinois and Baltimore agencies) Wells Fargo also said that, starting tomorrow, "it will discontinue funding mortgages that are originated, priced and sold by independent mortgage brokers" through the bank's wholesale funding operation. Broker home loans have been 5% of the bank's total. "Mortgage brokers operate as independent businesses and are not employed by Wells Fargo. Therefore, Wells Fargo cannot set loan prices for independent mortgage brokers."
UPDATE: Wells Fargo "denies the claims" it discriminated against black and Latino borrowers by charging them higher rates -- but the bank also "agreed to pay" anyway to "avoid litigation" the bank says here.
The bank claims the simultaneous decision to drop brokers is not related to the discrimination settlement.
WF should have settled this matter a long time ago. The Feds were going to take them to task. They are getting off cheap. Brokers and Bankers need to be accountable for their predatory behaviour. Next time take their licenses away.— A. Martinez- Right - so how does someone find out if they're covered by any part of this settlement?— Poit
Comment removed.- They are being extorted. The government has bled the tobacco companies dry, now they are doing it to the banks.— jyeag1185
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