Wells Fargo in $175M discriminatory lending settlement

by 12 Jul 2012

(CNNMoney) -- Wells Fargo has agreed to pay $175 million to settle allegations that it discriminated against minority borrowers, the Department of Justice announced Thursday.

The DOJ accused Wells Fargo, the nation's largest residential home mortgage originator, of pushing African-American and Hispanic borrowers into more costly subprime loans or charging them higher fees than comparable white borrowers. More than 30,000 minority borrowers between 2004 and 2009 were affected, the Justice Department said.

"If you were African-American or Latino, you were more likely to be placed in a subprime loan or pay more for your mortgage loan, even though you were qualified and deserved better treatment," Assistant Attorney General Thomas Perez said in prepared remarks Thursday.

"This is a case about real people -- African-American and Latino -- who suffered real harm as a result of Wells Fargo's discriminatory lending practices."

In 2007, for example, a typical African-American wholesale borrower in Chicago seeking a $300,000 loan from Wells Fargo paid nearly $3,000 more in fees than a similarly qualified white applicant, the Justice Department said.

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