New York, NY: A $175 million settlement has been agreed by Wells Fargo in a discrimination
action brought against the nation's largest residential home mortgage originator by the Department of Justice (DOJ).
The DOJ alleged Wells Fargo manipulated African-American and Hispanic borrowers into taking on more costly subprime loans or charging them higher fees than those issued to comparable white borrowers. More than 30,000 minority borrowers were affected between 2004 and 2009, 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 a statement.
"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."
As an example, in 2007, 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.
Wells Fargo has denied the government's allegations, saying it agreed to settle the case "solely for the purpose of avoiding contested litigation."
If the settlement receives final court approval, as part of the agreement, Wells Fargo will pay $125 million in compensation to victims of discrimination, and $50 million in down-payment assistance to borrowers in affected communities, CNN Money reports.
Hi my name kevin...I went to a bank to try to get a home mortgage, Im a disabled veteran, and I was discharged from a bankruptcy three and half years ago...the bank that chose was fully aware of all of my circumstances and conditions because I told the loan originator all of my past financial history...I was preapproved for the mortgage loan and I had decided on a house...the loan was processed under fha guidelines which required repairs to be completed on the home before the loan could be closed...there was repairs that were needed on the home and I had a homes repair contractor that was going to do the repairs, submitt a cost of repair agreement to the bank...the loan process took longer then ninety days because of the banks refusal to approve the loan with an underwriter...stating that they needed a statement proving the sources of my funds deposited into my checking account...I was able to provide legal proof of where the funds came from, dates, and times for which the loan originator asked for, for the undorwriter to approve the loan...from that stall after stall, after another until the end of the stress of the process, they asked for the same information more then three or four times...they withheld information that show up on my credit...which I had no way of knowing about...that was a judgement that I paid in full and made arrangements for it to be removed from my credit report...after all of the back and forth with the loan process I ask the loan originator if I was approved by the underwriter after a little over ninty days and she said NO in a email...I reply back to her and told her that under fha guidelines she had sixty days to tell me weather or not I was approved for the mortgage loan, and that was against the law...she replied back to my email with, I left out the word "YET"...the whole thing was frustrating and kind of mentally draining...I've gone through many loan processes throughout my life, but alot of what this bank did was unnecessary
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