Tartaglione: Settlement Helps More than 1,000 Philly Homebuyers
HARRISBURG, July 17, 2012 – State Sen. Christine M. Tartaglione today urged African-American homebuyers to contact the U.S. Department of Justice to see if they are qualified to receive part of a $125 million settlement with Wells Fargo.
“It’s terrible to find out that financial institutions are still considering race when evaluating lending applications,” Tartaglione said. “The multi-state settlement shows that such practices will not be tolerated and minority consumers can find protection under the law.”
Two years ago, the state human relations commission started an investigation to determine whether mortgage lending and foreclosure practices of Wells Fargo Home Mortgage and Wells Fargo Financial Pa. Inc. violated the Pa. Human Relations Act (PHRA) by targeting borrowers for discrimination based on their race.
The commission investigation was prompted by its statistical analysis of U.S. Dept. of Housing and Urban Development statistics, conducted with HUD funding. The study revealed substantial disparities in pricing and foreclosure rates between African American and white borrowers.
The investigation resulted in a complaint alleging that Wells Fargo engaged in reverse redlining, the practice of targeting African American borrowers for high interest loans without regard for their ability to pay.
The Human Relations Commission estimates that more than 1,000 Philadelphians were victims of the practice.
Settlement of the complaint requires Wells Fargo to establish the $50 million new homebuyer assistance fund from which qualified buyers will receive up to $15,000 for down payments. An additional $2 million will be designated for African-American residents in the city of Philadelphia who originated home loans with Wells Fargo between Jan. 1, 2004 and Dec. 31, 2009.
Other funds will provide cash rebates for African American borrowers who might have qualified for prime loans, but received nonprime rates from Wells Fargo. A federal government designee will determine and notify potentially eligible
Philadelphia area residents who believe they may be eligible for funds should email the U.S. Department of Justice at email@example.com.