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Wells Fargo to Pay $125 Million Lending Discrimination Settlement
By Mike Holter
Mortgage lender Wells Fargo & Co. has agreed to pay $125 million and set up a $50 million assistance fund to resolve allegations it discriminated against minority borrowers. This is the second Wells Fargo lending discrimination settlement reached in two years. The bank reached a $3.25 million class action lawsuit settlement in 2011 to resolve allegations it knowingly discriminated against borrowers in minority neighborhoods, resulting in those borrowers paying more for their loans than borrowers in non-minority areas of Los Angeles County.The latest Wells Fargo lending discrimination settlement will resolve government accusations that the bank put creditworthy Hispanic and African-American borrowers into more expensive subprime loans from 2004 to 2007, and that mortgage brokers added charges through 2009 that caused minority borrowers to pay higher fees, costs and interest than similar white borrowers.
“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 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.
Updated July 18th, 2012
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22 thoughts onWells Fargo to Pay $125 Million Lending Discrimination Settlement
Wells Fargo illegally forced me into foreclosure by not abiding by the Escrow Contract. Wells Fargo breached the contract by failing to put my taxes and insurance in the Escrow. I was notified a year later that I owed taxes for 2006 and 2007. The total balance was approximately $2000 which I was unable to pay or increase payments from $640 to $940 approx. by 50%, Well Fargo knew that I was not able to pay this amount.
I would like more information on the class action law suit with wells fargo. I am a customer of wells fargo and i ‘ve had some major problems with them.
I’am a 66year old black woman.My mortgage payments increased by almost $500 dollarsthis past spring.I’m on social security,lost my husband two years ago. applied for a hardship mortgage twice with Wells Fargo. They denied me twice.My mortgage is upside down.My mortgage is over $220,000 but the market value is only $140,000.Please add my name to this class action suite.
how can I get on the wells fargo lending lawsuit? I reside in Louisiana and wants to know how to sign up for that lawsuit?
In 2008 I was approved a Wells Fargo mortgage loan for 4.5%. The Wells Fargo loan officer spearheaded the process in which he contacted a local bank whom approved a builders loan at 7.5%. Wells Fargo was going to purchase the home from the local bank when my home was finished in six months. Three months into the build I received a letter from Wells Fargo stating that their loan had been pulled by my request. I immediately contacted the Wells Fargo loan officer who in turn continuously advised me and my wife to sue Wells Fargo and that it was accidentally pulled. The loan officer initially advised that I would not have to re-apply, however later he advised that I had to re-apply, which in turn did not get approved. Wells Fargo claimed that they had found two late payments from my previous home which was false. I was in a bind and settled with the local bank whom approved the builders loan and in turn continued the loan as a personal loan at the rate of 7.5%. Since then my family has been struggling to make ends meet, sometimes even having to borrow money to buy groceries. The local bank had filed a foreclosure due to late payments and unforeseen hardships of paying such a high mortgage payment, however a forebearance agreement has been recently met until next time someone decides to step on the little man. What do I do about this situation.
I need the information in regards to the class action law suit as it does apply to me
I would like to join the class action lawsuit. Can anyone provide me information as to how/
My husband financed a car through Wells Fargo in December 2010. Up until our move in October, we paid more than the minimum monthly payment?. In the upheaval of moving, we missed two months’ payments, and without warning, Wells Fargo repossessed our car:. We paid the fees and got it back, and part of the process was proof of insurance, which we faxed to them with the rest of the paperwork;. A couple months later we noticed our minimum balance was a lot higher than normal, and we called to find out why’. Wells Fargo told us we had been put on their insurance plan:. We told them to drop that immediately, put any money we had paid on this insurance plan towards our overall balance, and faxed them yet another copy of our insurance;. A month later, they repossessed our car on the claim that we owed almost $1,000 for failing to pay insurance fees that were fraudulently added to our balance in the first place|. Both repossessions were done in the dead of night (I leave for work at 4:30 in the morning and the car was already gone) with absolutely no warning or notice, or any cooperation afterwards/. We are thoroughly disgusted by the filthy business practices in effect by Wells Fargo, as well as the complete lack of customer service.
Wow… I read this w/ a gaping jaw. How audacious they are to think this is acceptable? THANK YOU 4 the share, & I hope you hurt them right back. Like they care what that does to a married couple (fights/ splits). Give it back to them TWICE AS HARD where their heart is; in their pocketbook! Take Care, Jess
PLEASE SEND MORE INFORMATION TO ME EMAIL ADRESS.
I want to no how I can get in one of these lawsuits. I lost my house over their stupidity. I still have all the paper work and never a apoligy from them. Then money that was sent to them was some how missed placed and after We lost our home that money showed up in the account. We had to move completely away from our kids. and Filed Bankruptsy to save the place now our credit is bad because of the bankruptsy. Please direct me so I can get in on this or a lawsuit.