On July 12, 2012, the United States, on behalf of over 34,000 African-American and Hispanic borrowers, filed a lawsuit under the Fair Housing and Equal Credit Opportunity Acts in the United States District Court, District of Columbia. Plaintiff, represented by attorneys from the United States Department of Justice, asked the court for injunctive and monetary relief, claiming that the discriminatory lending practices of Defendant adversely affected African American and Hispanic borrowers. Specifically, Plaintiff claimed that during and between 2004 and 2009, Defendant engaged in a pattern or practice of discrimination on the basis of race and national origin in residential mortgage lending. Two other cases -- Baltimore v. Wells Fargo (FH-MD-0001 in the Clearinghouse) and Memphis v. Wells Fargo (FH-TN-0002 in the Clearinghouse) have made essentially equivalent allegations.

On July 12, 2012, the Court entered a consent order resolving Plaintiff's claims. The settlement provided $125 million in compensation for wholesale borrowers who were steered into subprime mortgages or who paid higher fees and rates based on their race or national origin. Defendant also agreed to provide $50 million in direct down payment assistance to borrowers in certain areas of the country. Additionally, Defendant agreed to conduct an internal review of its retail mortgage lending and will compensate borrowers who were placed into subprime loans based on their race or national origin.

This case is ongoing with semi-annual reports by the Defendant.

Gregory Pitt - 07/16/2012


compress summary