Wells Fargo will “invest” in efforts designed to help improve housing in minority neighborhoods that have been hard hit by the foreclosure crisis, HUD announced Thursday. In reality, the bank is paying the huge sum to settle a dispute filed by the National Fair Housing Alliance (NFHA) in 2012.
Beneath HUD’s and NFHA’s decidedly altruistic spin, which details the bank’s commitment to revitalizing homeownership in minority communities, is the fact that Wells Fargo will hand over a total of $39 million to HUD, the NFHA and several other private fair housing organizations in order to resolve the complaint.
“NFHA is looking forward to working in partnership with Wells Fargo to make sure that all communities have a chance at a fair recovery,” said Shanna L. Smith, president and CEO of the NFHA. “We are thrilled to see Wells Fargo’s renewed efforts and leadership in this area.”
The regulators will distribute the money in communities across the country to support home ownership, neighborhood stabilization, property rehabilitation and housing development; all areas the the NFHA accused Wells Fargo of egregiously dropping the ball on.
The agreement settles the complaint filed in April 2012 by the NFHA that alleged that Wells Fargo maintained and marketed its repossessed properties in white neighborhoods better than it did it in minority neighborhoods. The NFHA detailed its findings of Wells Fargo and other large mortgage servicers – an investigation funded in part by a grant from HUD – in a 49-page report.
“We appreciate the perspectives and collaboration of NFHA and HUD, along with their efforts to shape the initiatives resulting from this agreement,” said J.K. Huey, senior vice president at Wells Fargo. “Today’s announcement is consistent with our longstanding commitment to home ownership, fair and responsible servicing, and investing in the communities we serve.”
HUD also reports that Wells Fargo has committed to ongoing enhancements in its maintenance and marketing of REO properties after foreclosure, which includes an enhanced training program for real estate brokers and agents who list REO properties and an extension of the amount of time that individual REO properties will be exclusively available for purchase by an owner-occupant or a nonprofit organization.