Wells Fargo Pledges More Than $435 Million To Resolve Memphis Mortgage Suit
Wells Fargo announced on Tuesday that it was able to reach an agreement with Memphis and Shelby County in regards to a discriminatory lending practices lawsuit, which was filed against the bank in December 2009.
The city and county have agreed to drop the lawsuit, according to CBS News, which stated that the mortgage lender allegedly targeted minority communities for predatory practices, which resulted in high-risk subprime loans, which lead to a higher number of foreclosures in those areas.
In return for the case’s dismissal, the bank will invest $7.5 million into the city and county for mortgage down payments and home renovations assistance, and promised to make more than $425 million in mortgages available over the next five years, according to The Wall Street Journal.
Memphis Mayor A.C. Wharton Jr. stated in a press release about the lawsuit that:
“The condition of the local housing market continues to challenge Memphis and Shelby County significantly, as unoccupied homes and excessive housing inventory weigh heavily on communities.We are pleased to announce this collaborative partnership to get more of these houses reoccupied and increase neighborhood stability.”
Leigh Collier, Wells Fargo regional president for the Mid-South, which includes Memphis, stated of the agreement that:
“We agreed that it was in the best interests of everyone involved to work together rather than to continue to be involved in a protracted legal fight.”
The company’s statement, according to CBS News, still denies the accusations against the bank. In their suit, the plaintiffs stated that:
“Wells Fargo’s disproportionately high foreclosure rate in Memphis’ and Shelby County’s African-American neighborhoods is the result of reverse redlining.”
Bloomberg reports that Wells Fargo still faces a lawsuit, in Baltimore, which began in 2008, and alleges that the lender allowed “illegal and discriminatory mortgage lending,” which caused foreclosures in minority neighborhoods.