Thursday, August 27, 2015

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)

0 comments

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 B
ank, 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. 


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.

Wells Fargo adds that the U.S. claims (including complaints by Pennsylvania, Illinois and Baltimore agencies) 
"
are based on a statistical survey of Wells Fargo Home Mortgage loans between 2004 and 2009, and the claims primarily relate to mortgages priced and sold to consumers by independent mortgage brokers."

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."

The bank claims the simultaneous decision to drop brokers is not related to the discrimination settlement.

More coverage
0 comments
We encourage respectful comments but reserve the right to delete anything that doesn't contribute to an engaging dialogue.
Help us moderate this thread by flagging comments that violate our guidelines.

Comment policy:

Philly.com comments are intended to be civil, friendly conversations. Please treat other participants with respect and in a way that you would want to be treated. You are responsible for what you say. And please, stay on topic. If you see an objectionable post, please report it to us using the "Report Abuse" option.

Please note that comments are monitored by Philly.com staff. We reserve the right at all times to remove any information or materials that are unlawful, threatening, abusive, libelous, defamatory, obscene, vulgar, pornographic, profane, indecent or otherwise objectionable. Personal attacks, especially on other participants, are not permitted. We reserve the right to permanently block any user who violates these terms and conditions.

Additionally comments that are long, have multiple paragraph breaks, include code, or include hyperlinks may not be posted.

Read 0 comments
 
comments powered by Disqus
About this blog

PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, distefano251@gmail.com, 215.854.5194 or 302.652.2004.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
Also on Philly.com:
letter icon Newsletter