Minority homebuyers to receive portions of $3.2 million Wells Fargo settlement

Rowhomes
The minority homeowners eligible for compensation received subprime loans from Wells Fargo to buy a home in Philadelphia. Credit: via WikiCommons

More than 1,000 minorities who took out a subprime mortgage loan from Wells Fargo to buy a home in Philadelphia will receive a portion of a $3.2 million settlement, the state said today.

The settlement is part of a multistate, $175 million settlement with Wells Fargo announced in December 2012, according to a statement. The $3.2 million was an increase from an original $2 million figure.

“Housing discrimination is simply not tolerated in Pennsylvania,” JoAnn Edwards, the commission’s executive director said in a statement. “We hope this settlement sends a clear message that home loans must be based on financial qualifications, not on race, national origin or any other protected factor.”

The 1,000 represents African-Americans and Hispanics who lived in Philadelphia and took out home loans with Wells Fargo from 2004 through 2009. The residents received notices of the amount they will receive if they participated in the settlement.

“A commission investigation starting in 2010 explored allegations that Wells Fargo discriminated by steering African-American and Hispanic borrowers into subprime mortgages, while white, non-Hispanic borrowers with similar credit histories were given prime mortgages,” according to the statement. “The complaint also alleged that Wells Fargo discriminated based on race and national origin in charging higher broker rates and fees to African-American and Hispanic wholesale borrowers, than to similarly qualified white borrowers.”

Wells Fargo has denied the charges.



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