Wells Fargo Bank agreed to pay $42 million to settle a complaint that it failed to maintain foreclosed properties in minority neighborhoods, turning the vacant houses into dilapidated eyesores.
The National Fair Housing Alliance and member organizations sued Wells Fargo in April 2012, alleging in an administrative complaint filed with the U.S. Department of Housing and Urban Development that the bank violated the Fair Housing Act.
The complaint alleged Wells Fargo’s so-called "real estate owned" properties in white areas were much better maintained and marketed than the properties in African-American and Latino neighborhoods. For example, houses in minority areas often had ill-kept yards, broken doors, peeling paint or boarded-up windows.
“Many neighborhoods across the country have been seriously damaged by the foreclosure crisis, including the impact of [real estate owned] homes on property values, curb appeal, and tax revenue for schools,” said Shanna Smith, head of the National Fair Housing Alliance. “Our joint efforts will help lay the foundation for the industry to get some of those neighborhoods back on their feet.”
The housing groups filed similar complaints against Bank of America and U.S. Bancorp, which are still pending.
Wells Fargo—represented by Skadden, Arps, Slate, Meagher & Flom partners Anand Raman and Joseph Barloon, who are both based in Washington—is the first to settle.
According to the plaintiffs, who turned to Joseph Sellers and Peter Romer-Friedman of Cohen Milstein Sellers & Toll, it’s the first-ever agreement regarding the equal maintenance and marketing of bank-owned homes.
Wells Fargo agreed to provide $27 million to the fair housing organizations to promote home ownership, property rehabilitation and development in 19 communities of color, including areas of Baltimore, Washington D.C. and Prince George’s County.
Another $3 million goes to the housing organizations to cover costs and attorney fees. The bank will also pay HUD $11.5 million to support neighborhoods in an additional 25 cities.
Fundamentally what is this going to solve? What is hoped to have been achieved with this settlement and this lawsuit?
Posted by: Conor McCartney | June 12, 2013 at 03:41 PM
From this 42 million if 24million will get invested in development then that will be sufficient. But God knows how much will get utilized.
Posted by: Elena | June 12, 2013 at 02:52 AM
Hmmm... @ and@; I do believe there's something missing between each of your comments. It's called common sense.
Personally, I find the unbridled, unchecked, boundless GREED of these banks to be offensive. Got nothin' to do with 'fear of trying lawsuits,' or 'racism.'
When you behave badly to EVERYONE; and you Know it, you shut-up and pay the piper.
And, @mianaja,, when I give up my already broken down, boarded up house to the bank next month, it'll be somewhat of a relief, because
A)I did ABSOLUTELY nothing wrong. Not. One. Thing.
and B)2 different 'friends' bought during the toxicity, but were amongst those who ADDED to it. They now qualify for Federal relief progs, getting free lawyers, and FREE rent in their McMansions while they await loan modification --over12 months now!
I bought a tiny, modest home on a mortgage I could afford...And yet, I still got screewd with a capital "F." (No bailouts for me)
-Last time I checked, my skin was pretty darn white.-
Posted by: LadyJ | June 10, 2013 at 11:55 PM
@Oliver, this is not a liberal group, these are neighborhoods that when the bank forecloses on the house, they are supposed to maintain the property and they deliberately did not maintain the property in minority neighborhoods while maintaing properties in white neighborhoods. Everyone knows that overgrown yards and boarded up windows and broken doors and whatnot and peeling paint on a home make the whole street look bad and bring down property values, which bring down tax revenue, which affect schools, which affect money to those schools, and its a downward spiral. So its not just some "liberal group" these are actual communities affecting thousands of peoples lives. I'm glad that Wells Fargo was held accountable for its racist policies.
Posted by: mianaja | June 07, 2013 at 08:33 AM
Try the damn case! Quit retreating every time some liberal interest group makes a threat.
Posted by: Oliver Transue | June 06, 2013 at 04:29 PM