Wells Fargo to pay $175 million for systematically robbing black and latino homebuyers
Wells Fargo To Pay $175M Racial Discrimination | ThinkProgress
Yesterday, the Justice Department announced an agreement by Wells Fargo to pay $175 million in order to settle claims that its independent brokers discriminated against black and Hispanic borrowers. The Wells Fargo settlement, if approved, will be the second largest residential fair-lending settlement in DOJ’s history.
DOJ found that Wells Fargo’s discriminatory lending practices resulted in African-American and Hispanic borrowers paying higher rates for loans solely because of the color of their skin. Minority borrowers were both steered into sub-prime loans and charged higher fees.
An investigation by the department’s civil rights division found that mortgage brokers working with Wells Fargo had charged higher fees and rates to more than 30,000 minority borrowers across the country than they had to white borrowers who posed the same credit risk, according to a complaint filed on Thursday along with the proposed settlement.
Wells Fargo brokers also steered more than 4,000 minority borrowers into costlier subprime mortgages when white borrowers with similar credit risk profiles had received regular loans, a Justice Department complaint found. The deal covers the subprime bubble years of 2004 to 2009.
Thomas Perez, the assistant attorney general for the civil rights division, said the practices amounted to a “racial surtax,” adding: “All too frequently, Wells Fargo’s African-American and Latino borrowers had no idea they could have gotten a better deal — no idea that white borrowers with similar credit would pay less.”
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