Wells Fargo Discrimination Complaint: Lender Accused Of Not Maintaining Foreclosed Homes In Minority Areas

WASHINGTON — A group of U.S. nonprofit housing advocates has filed a discrimination complaint against Wells Fargo, accusing the nation's largest mortgage lender of failing to maintain and market foreclosed properties in black and Hispanic neighborhoods.

The National Fair Housing Alliance on Tuesday filed the complaint against San Francisco-based Wells Fargo and Co. and Wells Fargo Bank with the U.S. Department of Housing and Urban Development.

Wells Fargo said in a statement that disputed the claim. It said it conducts all lending practices in a fair and consistent manner without regard to race. The bank services one out of every six home loans in the United States.

The federal Fair Housing Act requires banks, investors, servicers and other parties to maintain and market homes without regard to race or ethnicity.

The advocacy group began investigating the conditions of bank-owned properties in 2010. It looked more than 200 homes in a handful of cities: Atlanta, Baltimore, Dallas, Dayton, Ohio, Miami and Fort Lauderdale, Fla., Oakland, Calif., Philadelphia and Washington.

Bank-owned homes in white communities were treated in a "far superior manner," the complaint alleges. Those homes were 33 percent more likely to be marketed with a professional "For Sale" sign than homes in black or Hispanic communities.

Nationwide, about 2.7 million homeowners faced foreclosure last year.

Comments

[NotSoFastSteph]

09:17 PM on 04/10/2012

My company buys these homes from banks. I personally evaluate 300-400 each month. Maintenance of these homes is handled by outside contractors, none are well maintained, each equally mismanaged. Contractors properties on a schedule, each getting a visit about once a month.

I have read this complaint, it is political nonsense.

These properties are vacant. Each lender establishes the frequency that contractors visit properties. Bank A may set the frequency at 3 weeks, bank B 4 weeks, etc. The frequency of contractor visits is equal and consistent depending on the bank (there are contractor sign in sheets inside each property).

Q: Who do you think is breaking the locks, breaking the windows, vandalizing the interiors, stealing the appliances, dumping trash in the yards? A: The residents of the communities.

My experience is consistent. In low income communities, the more the properties will be damaged. In higher income communities, the opposite is true. In higher income communities, I neighbors often mow the grass of these homes. Not once have I encountered this in lower income communities. In higher income communities, neighbors ask who I am and what I am doing. In lower income communities I have encountered squatters, people using drugs, toilets, sinks, tubs, full of feces, nobody has asked why I am there.

This is a problem, but the finger is being pointed in the wrong direction for the wrong reasons. Isn't anyone else weary of this sort of nonsense?

[lofttypeofaview]

11:26 PM on 04/10/2012

You comment doesn't address why higher income neighborhoods have professional for sale signs and the lower income neighborhoods only have cardboard. Surely it isn't the residents whom decide this.

[NotSoFastSteph]

07:10 AM on 04/11/2012

With REO properties, marketing is minimal regardless of average income of the community.

Banks list properties with an agent who enters the property into the local MLS service (or whatever your local area has named their MLS). The agent, who is independent, not a bank employee, is the party who places signs. That is the extent of marketing.

Once a sign is in place, one can only suppose what happened to it. I have never seen a cardboard for sale sign on any REO listing an agent or bank phone number. I have seen for sale by owner signs that the defaulting homeowners had placed attempting to sell pre-foreclosure. I assume this is what they are referring to.

I live in one of the metro areas listed in this lawsuit, and we operate in this market as well as a second market listed in the suit, as the 2 metro areas are 30 minutes apart. In the previous 8 years I have evaluated more properties than those filing this lawsuit. They list a lot of statistics but no specifics, there is no way to check the validity of their claims.

File a lawsuit, make racially charged claims, refer to 'white' communities in every paragraph. Looks like grass roots election year politikin' community organizer style.

[The Knocker]

07:49 PM on 04/10/2012

Wells Fargo does not only have a history of making it difficult for minority to qualify for loans but will also take quick action to foreclose on minorities who are struggling to make their mortgage payments.

[Tristman]

07:57 PM on 04/10/2012

Then why did the NAACP have a class action lawsuit against them in '09, claiming they preyed on minorities to "ease" them into Adjustable Rate Mortgages? That wouldn't be classified as "difficult for minority to qualify for loans".

[The Knocker]

08:26 PM on 04/10/2012

"Mortgage-backed securities" is the reason.

[Joyce Wheeler]

09:30 PM on 04/11/2012

4/11/2012

BAIL US HOMEOWNER'S OUT- LIKE THE BANK WAS BAIL OUT

I have a mortgage with wells fargo and they wouldn't work with us no kinds of way,the job loss with unemployment runs out and 4 late payments and now i'm foreclose since 7/6/2011-Working with EXIT METRO REALTOR'S* SHAWN HARRIS & CHARLES FREND had a (2)sale contract from the same Buyer, theIr last loan was with Wells Fargo.
OUR LOAN MODIFICATION was DENIED not (1) but (2) times.We work with a home preservation specialist name JOSEPH MOORE who was very nasty to us and never wanted to HELP US STAY IN OUR HOME.
Something needs to be done ASAP about Wells Fargo taking Home Owners Property away from them with all their lies & tricks they pull to steal your property away from the home owners.In which they reported that my townhouse was vacant & no utilities were on in which was a lie but all my complaints fell on deaf ears and the balance kept going up,so you can't afford to get your home back.
I contact HUD but still no Help from anyone as of today's date April 11,2012
The HOME SAVER PROGRAM located in Washington,Dc.
DISTRICT OF COLUMBIA HOUSING FINANCE AGENCY at 8th & Florida avenue n.w has turn us down and we ask for APPEAL and it was DENIED also.

[SPacific]

07:00 PM on 04/10/2012

But the right keeps saying that there is no more racism in America...............

[Tristman]

07:58 PM on 04/10/2012

No they don't...they say we are "post racial". Racism will always be around, but those that choose to, are very few and they have no place in society and they don't set policy.

[T-Haight]

06:33 PM on 04/10/2012

Liberals, hold your applause. Remember that the housing industry has been itching for a case to bring the Fair Housing Act to the Supreme Court to determine whether disparate impact theory - the current basis for Dept. of Justice enforcement - is in fact legal.

The disparate impact lobby was so desperate to avoid the possibility of a defeat that Justice convinced, what was it, St. Paul, or Minneapolis, I forget, but anyway, they convinced the city to pull a lawsuit that would have gone before the court.

This sounds like it could be a new opportunity to revisit the issue in the court system.

[SantaMonican]

06:30 PM on 04/10/2012

I have 3 words for the Wells Fargos of the world:

Sherman Antitrust Act

Go get' em, Mr President.

[EveryoneLies]

05:29 PM on 04/10/2012

so how many fines and accusations before we start closing some of these banks. I audit the defaulted fannie mae portfolio of loans. My jobs is to verify the loans were underwritten to program guidelines, have all required documentation, make sure the property was securitized correctly and make sure the appraised value is accurate. my company is the largest contractor to Fannie doing this. we average over 10,000 reviews monthly. If any of the review items are wrong then there is a significant finding and Fannie attempts to make the banks repurchase the loan. as a company we have a 64% significant findings rate.....in what other industry is a 64% failure rate acceptable??????? why are these banks still open??????? if your automechanic failed 64% of the time would he be in business???? would you what the heart surgeon that can only get it right 36% of the time????? this is all disguisting and unacceptable. when is it time for the revolt??? hope it is soon

[joeThibo]

05:15 PM on 04/10/2012

Wow who would have thought that Hud who created this housing mess will now decide if a Bank is not acting fair See the info:
http://www.villagevoice.com/2008-08-05/news/how-andrew-cuomo-gave-birth-to-the-crisis-at-fannie-mae-and-freddie-mac/

[Right Girl]

05:00 PM on 04/10/2012

I live in an upscale, white neighborhood and we have 2 homes in foreclosure. Both houses have been empty for over 2 years, have unkept lawns, and look like tenements. So it's not just black neighborhoods where the homes in foreclosure aren't being kept up. Why does EVERYTHING have to be about race?

[Strywever]

05:15 PM on 04/10/2012

What does your individual experience have to do with a study of this bank's overall practices? Apparently the evidence in this case points to a racial consideration. BTW, it is safe to assume that the investigators looked at neighborhoods with a real foreclosure problem -- not just two homes, but enough to meaningfully influence the value of other homes in the neighborhoods.

[Right Girl]

05:37 PM on 04/10/2012

The whole premise of the article was that Wells Fargo was discriminating against black neighborhoods by not keeping up the properties in foreclosure when, in point of fact, the banks aren't keeping up foreclosure homes in ANY neighborhoods. While I hate looking at the 2 uncared for homes in my neighborhood, I can understand that the mere numbers of homes in foreclosure would make it prohibitive to try and maintain them all in a pristine condition.

[apans]

05:16 PM on 04/10/2012

It's easier to push agendas when you make it about race.

[DrSkepsis]

04:55 PM on 04/10/2012

Maybe it's market driven.

[apans]

05:19 PM on 04/10/2012

No way. It has to be race. It would have nothing to do with the fact that the houses in "white communities" are typically more valuable assets which the bank probably has higher exposure on and a better chance of recouping losses. No way. It's definitely about race...

[EKAM8]

04:50 PM on 04/10/2012

The Banksters grew 10 arms and 10 legs after the 2008 crisis. If you fail or stuff up you get a free pass for life. You can do no wrong. Fraud,discrimination,bullying,cheating,theft,no problem the world is ruled by these money lenders.

[FuriaRoja]

04:46 PM on 04/10/2012

Good.

[Cyberfox]

04:37 PM on 04/10/2012

Thanks HuffPo for continuing the race wars. Since the media has misrepresented what happened in the Trayvon Martin case, people have been going around killing each other, beating up each other and using Trayvon as an excuse.

[Cyberfox]

04:35 PM on 04/10/2012

Got news for ya...Foreclosed homes in better neighborhoods are often cared for by neighbors who don't like eyesores. Banks don't take care of them that well either.

[FuriaRoja]

04:48 PM on 04/10/2012

I don't see boarded up homes in wealthy neighborhoods. Also, I bet they don't pay the electric bills to make sure the lights are on so it looks like someone lives there.

There is a big difference in upkeep, and I live in an upper middle class neighborhood with a couple of foreclosures.

[Hank Chiappetta]

05:11 PM on 04/10/2012

I hope they do the same for yours

[chadizzy]

04:29 PM on 04/10/2012

If so I am sure it has a lot to do with HOAs!

[Rob Paterson1]

04:24 PM on 04/10/2012

so not true.