Just last month, the Chicago Tribune reported that the National Fair Housing Alliance and thirteen of its members, including two groups in the Chicago area, will receive $27 million to promote home ownership, encourage neighborhood stabilization, and to advance the rehabilitation and development of properties in minority communities. In short, the funds will help with the foreclosure crisis.
This large settlement stems from an agreement related to a federal housing discrimination complaint that was filed against Wells Fargo back in April 2012. According to the Chicago Tribune, it alleged racial discrimination—“the bank took better care of its bank-owned foreclosures in white neighborhoods than those in African-American and Latino communities.”
If you believe you or a loved one have experienced housing discrimination that has led to foreclosure, an experienced foreclosure defense attorney can discuss your case with you today.
History of the Claim
The National Fair Housing Alliance, based in Washington, D.C., is a consortium of private, nonprofit fair housing groups, according to the Chicago Tribune. In April 2012, the alliance filed a complaint against Wells Fargo, along with a claim against U.S. Bancorp with the assistance of the U.S. Department of Housing and Urban Development (HUD).
The Chicago fair housing groups that will benefit from the settlement include the HOPE Fair Housing Center in West Chicago, and the South Suburban Housing Center in Homewood. They’ll share $2.8 million, and they’ll use those funds to offer grants “for down payment assistance to homebuyers in neighborhoods hard hit by foreclosure that are targeted for revitalization.”
Originally, Chicago was only included in the complaint against U.S. Bancorp. However, the alliance filed another complaint against Bank of America that included 13 cities. This time, Chicago was part of the lawsuit. This settlement is the first one that has come out of these complaints filed in 2012.
Will Reforms Come with the Settlement Agreement?
Shanna Smith, the president and CEO of the alliance, described the settlement as “a huge step in the right direction,” and explained that the funds are desperately needed “to get our neighborhoods, especially communities of color, back on their feet.” Sounding pleased with the settlement, Smith said, “other banks should follow Wells Fargo’s lead and engage in broad relief to communities damaged by the foreclosure crisis.”
When it comes to paying out for the discrimination claims, Wells Fargo will pay $3 million to the alliance and the thirteen fair housing groups “for costs and damages,” according to JS Online. In addition, Wells Fargo will provide additional funding to aid in housing recovery. It will commit $300,000 for two national conferences, and $250,000 to local fair housing centers so they can “hold seminars and address delinquencies and foreclosures.” The settlement will also allot $11.5 million to HUD, which will use the funds to support and stabilize neighborhoods in 25 cities across America.
And the agreement isn’t just monetary in nature. In an attempt to remedy its own practices, Wells Fargo also “committed to certain standards” for the ways it maintains and markets repossessed properties. JS Online outlined this part of the agreement, explaining that new practices include:
· Homeowner priority program: this involves giving owner-occupants higher priority over investors when it comes to purchasing real estate-owned property. In addition, Wells Fargo will create a five-day homeowner priority period whenever there’s a price reduction on a Wells Fargo-owned property.
· Monitoring: a third party will monitor Wells Fargo’s real estate-owned properties to make sure that they’re maintained and marketed according to non-discriminatory standards.
· Access: Wells Fargo will make it easier to obtain information about its properties.
If you have questions about how the settlement might affect you, or if you have concerns about avoiding foreclosure, a foreclosure defense lawyer will be able to help. Contact us today.
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