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Wells Fargo Pays Philadelphia $10 million – Predatory Lending

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Background:

  • May 2017 the City of Philadelphia sued Wells Fargo accusing predatory lending violations..
  • Predatory Lending violates the Federal Fair Housing Act.
  • The City alleged that, since 2004, Wells Fargo steered minority borrowers into higher cost, riskier loans than white borrowers even if they qualified for loans with better terms.
  • The City alleged Wells Fargo  refused to let minority borrowers refinance.
  • Black and Hispanic borrowers were much more likely to go into foreclosure on the loans that Wells Fargo gave them.
  • Philadelphia’s higher default rates for minority borrowers hurt the City financially:  lower property tax revenues and higher costs to combat crime and blight.

Outcome:

  • December 2017 Wells Fargo agreed to pay the City of Philadelphia  $10 million to settle the lawsuit.
  • Wells Fargo denied the allegations in Philadelphia’s claim.
  • $8.5 million will be used to provide down payments and closing costs for low and moderate-income families.
  • The remainder of the money will go to preventing foreclosures and revitalizing vacant lots.

A real win for Philadelphia. Predatory Lending hurt so many.