Wells Fargo Rejected More Than Half of Black Applicants in 2020

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

Wells Fargo Racist Mortgage Approval Rates Report Overview:

• Who: Wells Fargo denied more than half of Black homeowners mortgage refinancing while approving 72% of white applicants, a new Bloomberg report has revealed.
• Why: Bloomberg used federal mortgage data to analyze the situation. Wells Fargo says other “credit-related factors” attributed to the numbers.
• Where: The mortgage applications are nationwide.

Wells Fargo refinanced 72% of white homeowners during the recent mortgage refinancing boom while denying 53% of Black homeowners, a new report finds.

Bloomberg issued a new analysis of federal mortgage data Mar. 11 that found that most Black homeowners were denied mortgage refinancing by the bank in 2020 even when they had exceptional credit scores upwards of 800. 

“While Black applicants had lower approval rates than White ones at all major lenders, the data show, Wells Fargo had the biggest disparity and was alone in rejecting more Black homeowners than it accepted,” the analysis found.

The report compared data from 2020 when interest rates were at record lows. 

The report comes as the Federal Reserve’s policy committee moves to hike interest rates at its March meeting. 

The hike would likely mark the end of an era that has seen U.S. homeowners refinance almost $5 trillion in mortgages over the past two years, the most since the early 2000s, Bloomberg reports.

It’s one that allowed white homeowners to save an estimated $3.8 billion annually by refinancing their mortgages in 2020, according to researchers at the central bank. 

However, Black Americans, who make up 9 percent of all homeowners, have not seen the same benefits. Black homeowners locked in just $198 million a year in savings, less than 4% of their white counterparts.

Bloomberg’s analysis found that Black homeowners had the lowest approval rate by lenders nationwide in 2020, as well as the smallest number of applicants. 

In response to the analysis, Wells Fargo told Bloomberg it did not dispute its statistical findings. However, it would not speak to specific cases, and said it treats all potential borrowers the same, is more selective than other lenders and said “legitimate, credit-related factors” were responsible for the differences. 

To compile the report, Bloomberg looked at Home Mortgage Disclosure Act data for 8 million completed applications to refinance conventional loans in 2020. 

Wells Fargo Settles Bankruptcy Credit Reporting, Unlawful Recording Claims

Meanwhile, according to class action lawsuits, Wells Fargo is one of the worst banks in America.

The bank has recently been in the spotlight with the financial institution agreeing to pay $3 million last month to resolve allegations it mishandled customers’ bankruptcy credit reporting. 

The settlement capped off a 2018 class action lawsuit filed by customers who argued Wells Fargo failed to properly update the credit reports for individuals whose debts were sold off after they filed for Chapter 7 bankruptcy. 

The agreements came on the heels of final approval being given in December for a $28 million settlement between Wells Fargo and customers who claimed the bank recorded them without consent. 

Customers in that complaint argued telemarketing merchants hired by Wells Fargo recorded them during sales calls without their knowledge or consent. 

Also in December, attorneys working with Top Class Actions announced they are looking into recovering hundreds of millions of dollars in overdraft fees Wells Fargo allegedly improperly charges its customers annually. 

If you are a Black, Latino or other racial minority homeowner whose refinance application was denied by the bank between 2019 and 2021, you may qualify to participate in this Wells Fargo Refinance Discrimination lawsuit investigation. Click here for more information (links to paid attorney content).

Read About More Class Action Lawsuits & Class Action Settlements:

• McCormick Perfect Pinch, Gourmet Seasoning $3M Class Action Settlement
• Zoom-Bombing $85M Class Action Settlement
• TikTok Data Privacy $92M Class Action Settlement
• Tinder Age Discrimination $5.2M Class Action Settlement