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The U.S. Department of Justice and Wells Fargo Bank Thursday announced a $175 million settlement of allegations that the bank discriminated against African-American and Hispanic borrowers who obtained home mortgages between 2004 and 2009.
The Justice Department simultaneously filed a lawsuit alleging bias and the proposed settlement in U.S. District Court in Washington, D.C., Thursday.
A federal judge must approve the settlement before it is final.
The lawsuit alleges that an estimated 34,000 African-American and Hispanic home buyers who obtained mortgages directly or indirectly from Wells Fargo were steered into costlier subprime loans or required to pay higher fees and rates than similarly qualified non-Hispanic whites.
San Francisco-based Wells Fargo does not admit any wrongdoing in the settlement.
“Wells Fargo is settling this matter because we believe it is in the best interest of our team members, customers, communities and investors to avoid a long and costly legal fight,” said Wells Fargo Home Mortgage President Mike Heid.
The bank wishes “to instead devote our resources to continuing to contribute to the country’s housing recovery,” Heid said in a statement.
Deputy U.S. Attorney General James Cole said, “The department’s action makes clear that we will hold financial institutions accountable, including some of the nation’s largest, for lending discrimination.
Caveat Emptor!
Gather information and shop around.
Better yet, save first, then buy.
Mike
The people that got denied loans now get money PLUS they were spared from buying an overpriced house that would probably be underwater or foreclosed on by now. What an ironic twist of good luck for someone that was discriminated against…lol.
Shouldn’t corporations show some remorse just like people want to see remorse from petty criminals?
I think we need to be compassionate toward Wells Fargo, for as a corporation it is a person with feelings, too. Thankfully this sort of occurrence rarely happens in a free enterprise system. Because free enterprise brings out the best in people. It makes them honest, forthright, transparent, and willing to show the public their personal tax records. What is far worse than the irony of a great corporation being discriminated against for allegedly discriminating against people who didn’t have enough cash to buy a house outright, is that we have a sitting president who has never released his law school transcripts (where, hmph, he was president of the Harvard Law Review) and who obviously is in way over his head.
Golly, I just had the most brilliant idea! What are people who can’t even afford to buy their own homes going to do with $175 million? Is it not safe to say that they will likely fritter it away on essential consumer goods? So, I’m thinking on judgments such as this, the $175 million should be awarded only symbolically to the little people while the actual $175 million should be diverted to wealthy job creating heroes, like myself and my friends. This strikes me as being a sound business decision that would improve our economy immensely. That is why we need a businessman in the White House, not this other guy who’s in over his head. (Hey, has he ever shown his law school transcripts yet? How in the heck did he become student president of the Harvard Law Review anyway? One of my staffers heard that Acorn might have been behind it.)
Mr. Mitt (aka Mr. Transparency)
Melanie,
The article doesn’t say the people’s loans were denied, it said they “were steered into costlier subprime loans or required to pay higher fees and rates than similarly qualified non-Hispanic whites.” Many of them undoubtedly are underwater or foreclosed now.