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Can’t Bank on Wells Fargo for Housing

Posted on 17. Apr, 2012 by

Blighted bank-owned propertyWe talk a lot about how predatory loans were targeted at racial minorities, but it turns out discrimination doesn’t stop at foreclosure.  The National Fair Housing Alliance (NFHA) and four of its member organizations are challenging the ethics of Wells Fargo & CO. and Wells Fargo Bank, N.A. by filing a housing discrimination complaint. The complaint was filed because of an undercover investigation of Wells Fargo’s bank-owned foreclosed properties- NFHA found that in white neighborhoods these properties were better maintained than in non-white neighborhoods.

NFHA did an investigation of foreclosed properties owned by Wells Fargo in eight metropolitan areas; Dayton, Ohio, Atlanta, Georgia, Philadelphia, Pennsylvania, Oakland, California, Miami/Fort Lauderdale, Florida, Dallas, Texas, Baltimore, Maryland, and Washington, DC. In each of these areas, NFHA investigators came with the same conclusion that more Wells Fargo properties in white neighborhoods were well kept and maintained, while Wells Fargo properties in non-white neighborhoods had many deficiencies. A very small percentage of the Wells Fargo properties in white neighborhoods had similar deficiencies. Some of the deficiencies include water damage, no “for sale” signs, overgrown lawns, broken windows and doors, and trash on the property.

Wells Fargo claims to place strong emphasis on their ethics, values, and goals to ensure trust from individuals and communities. Based on Wells Fargo’s website, they “strive for the highest ethical standards with team members, customers, communities, and shareholders by using honesty, trust, and integrity.” After this undercover investigation, how can NFHA and other member organizations not challenge the ethics of Wells Fargo for ensuring maintenance and upkeep in certain areas but not all?

This complaint filed with HUD by NFHA and its member organizations attests to the failure of Wells Fargo to realize its vision and goals by exposing how they allegedly violated the Fair Housing Act. Passed in 1968, makes it illegal to discriminate based on race, religion, color, sex, national origin, familial status, or disability. This law also protects from discrimination based on the race or national origin of residents of a neighborhood in the maintenance, appraisal, listing, marketing, and selling of homes.

Interestingly, when individuals see poorly maintained homes in a certain neighborhood, the finger is often pointed at people who live in the community, not the bank. The high percentages of poorly maintained bank-owned properties in non-white areas will have a negative impact on these communities. The neighborhood property value will decrease and there can also be negative psychological effects on the residents. These effects can also lead to negative widespread impacts, especially in the housing market. This case is very important because it examines how racism is still alive and how it is used to separate neighborhoods.

You can read NFHA’s report, “The Banks Are Back, Our Neighborhoods Are Not: Discrimination in the Maintenance and Marketing of REO Properties,” here.

One Response to “Can’t Bank on Wells Fargo for Housing”

  1. Hannah Adams 17 April 2012 at 2:46 pm #

    This is particularly interesting in the context of the Memphis and Baltimore lawsuits against Wells Fargo alleging that the bank participated in discriminatory “reverse redlining” practices that targeted predatory loans at minority borrowers.

    As the largest mortgage lender in the country, it’s pretty alarming that Wells Fargo is once again accused of a fair housing violation.