Wells Fargo settles complaint alleging neglect of foreclosed homes

June 7, 2013 at 12:31 PM
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WASHINGTON, June 7 (UPI) -- U.S. banking giant Wells Fargo settled claims it neglected to maintain and market foreclosed homes in minority neighborhoods, an advocacy group said.

Under the agreement announced Thursday, Wells Fargo will provide $27 million to non-profit groups to promote home ownership, neighborhood stabilization and property rehabilitation in minority communities in 19 metropolitan areas, and $11.5 million to the U.S. Housing and Urban Development Department to assist 25 other cities, The Washington Post reported.

Wells Fargo admitted no wrongdoing.

A yearlong investigation by the National Fair Housing Alliance found homes serviced by Wells Fargo in black and Latino communities were more likely to be left in disrepair than homes in white neighborhoods and were less likely to have for-sale signs.

"Many neighborhoods across the country have been seriously damaged by the foreclosure crisis," Shanna Smith, president and chief executive of the alliance, said.

The agreement "will help lay the foundation for the industry to get some of those neighborhoods back on their feet," Smith said.

As part of the agreement, Wells Fargo agreed to give priority in the bidding process to borrowers planning to live in a home after buying it over investors who want to flip the property. The bank agreed to develop a fair housing training program for employees and real estate agents selling foreclosed properties, contribute $250,000 to the housing alliance to sponsor seminars on foreclosure prevention and $300,000 for two conferences on fair housing laws.

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