Wells Fargo to Pay $125 Million Lending Discrimination Settlement By Mike Holter
“Wells Fargo’s internal documents reveal that senior officials were aware of the numerous tactics that subprime originators employed to keep loans in the subprime division,” when they could have qualified for prime loans, the Justice Department alleged in the lending discrimination lawsuit.
Wells Fargo to Pay $125 Million Lending Discrimination Settlement
By Mike Holter
Wells Fargo denies it engaged in illegal discrimination and said it agreed to the class action settlement to avoid the cost of ongoing litigation. The bank also agreed to stop using outside brokers to create mortgages and to provide $50 million in direct payments for down-payment assistant in eight U.S. regions where the Justice Department alleges Wells Fargo’s lending discrimination practices had the most impact.
The Wells Fargo lending discrimination settlement is part of the Obama administration’s effort to crack down on lending discrimination to reduce loan defaults during the housing bust. The Wells Fargo settlement is the second largest reached by the Justice Department. In December 2011, the DOJ reached a record $335 million settlement with Bank of America after it found the bank’s Countrywide unit assessed higher fees and interest rates on more than 200,000 black and Hispanic borrowers from 2004 through 2007.