Bank Settlement Could Benefit 2,100 Bay Area Borrowers
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Thursday's mortgage-discrimination settlement between San Francisco's Wells Fargo and the U.S. Department of Justice could lead to payments totaling $3 million to black and Latino borrowers in the Bay Area.
A Justice Department complaint alleged that from 2004 to 2008, the bank pushed about 34,000 African-Americans and Hispanics nationwide into pricey subprime mortgages and charged higher fees than it would've charged comparable white borrowers.
In entering into the $175 million nationwide settlement, Wells Fargo denied any wrongdoing. Bank spokesman Oscar Suris described the agreement as “constructive.”
Avoiding 'Prolonged Legal Fight'
Suris said it’s not in the bank’s interest to “engage in a prolonged legal fight with the Department of Justice. We think our resources are better spent and focused continuing to lend to home buyers.”
Carolyn Williams, an African-American West Oakland resident, says she believes the bank discriminated against her family. She said that in 2008, Wells Fargo gave her husband a high-interest loan without considering his credit score or well-paying job at the Port of Oakland. "We could have been given a better deal if we [were] looked at as a human being instead of as a person of color."
The bank couldn't confirm that Williams was a Wells Fargo borrower by our deadline.
Disappointed in Bank's Response
Kevin Stein with the California Reinvestment Coalition said he was disappointed that Wells Fargo didn't admit to discriminatory practices.
"We want to see Wells, as the largest lender, be a leader in promoting and preserving fair housing," Stein said. "It’s no small thing that the DOJ finds discrimination."
In what Suris described as a business decision, Wells Fargo announced it would stop the practice of selling loans through independent mortgage brokers. These wholesale loans, the focus of the lawsuit, account for 5 percent of Wells Fargo home mortgages.
In a statement on the settlement, Deputy Attorney General James M. Cole said, “An applicant’s creditworthiness, and not the color of his or her skin, should determine what loans a borrower qualifies for.”
The Department of Justice says borrowers who believe Wells Fargo discriminated against them can email email@example.com
U.S. Department of Justice complaint: USA v. Wells Fargo Bank
Bank statement: Wells Fargo Announces Settlement with U.S. Department of Justice Regarding Mortgages