JUN 6, 2013 11:10am ET

Wells Fargo Agrees to Improve REO Practices

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Wells Fargo Bank has agreed to improve its maintenance and sales practices with respect to the foreclosed properties it owns and services for third parties in response to a fair housing complaint filed by the Department of Housing and Urban Development.

As part of the agreement with HUD, Wells Fargo Bank NA will extend the amount of time that individual REO properties will be marketed exclusively to homebuyers and nonprofit groups to increase the chances the houses will be purchased by owner-occupants.

The San Francisco-based bank also made a commitment to invest $39 million in 45 communities to provide support for neighborhood stabilization, property rehabilitation and housing development. The National Fair Housing Alliance participated in the negotiations.

“These agreements represent a significant commitment by Wells Fargo, HUD and NFHA to invest in programs that will strengthen minority communities impacted by foreclosures,” said Wells Fargo Home Mortgage senior vice president JK Huey.

“NFHA is looking forward to working in partnership with Wells Fargo to make sure all communities have a chance at a fair recovery,” said NFHA president and chief executive Shanna Smith.

The giant bank also agreed to make best practices revisions to its Wells Fargo Premiere Asset Services Broker Procedures Manual. This manual is used by real estate professionals nationwide in the maintenance and marketing of Wells Fargo REO properties.

“Wells Fargo will continue to focus its resources on responsibly maintaining, rehabilitating and marketing our REO properties nationwide,” the WFHM senior vice president said.

She noted that Wells Fargo has spent nearly $11,000 per home for repairs on approximately 71,000 REO properties that have been sold since 2009. “We also have donated 2,974 REO properties and sold at a discount 3,728 additional properties to government and not-for-profit organizations,” she said.

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