Following a housing discrimination settlement, Wells Fargo will provide $27 million to the National Fair Housing Alliance that will be used to provide marketing and maintenance financing to 19 cities severely impacted by the foreclosure crisis.
Under the terms of the agreement NFHA members will use the funds to promote home sales and neighborhood stabilization in affected minority neighborhoods accross the country.
Wells is the frist bank to sign such agreement regarding the equal maintenance and marketing of bank-owned foreclosure homes that resulted from a federal housing discrimination complaint filed by NFHA in April 2012 with the Department of Housing and Urban Development.
Thirteen NFHA member organizations will work with Wells to assist rebuilding efforts in areas htat have large inventories of REO properties owned by Wells.
Nonprofit fair housing members will provide various grants, including downpayment assistance, “to owner-occupants seeking to purchase homes in targeted neighborhoods.”
Geographic areas include Atlanta, Baltimore, Prince George’s County, Md., Baton Rouge/New Orleans, Charleston, S.C., Chicago, Oakland and Richmond, Calif., Dallas, Denver, Indianapolis, Miami, Orlando, Philadelphia and Washington.
Joint efforts will help neighborhoods seriously damaged by the foreclosure crisis that still are suffering “the impact of REOs on property values, curb appeal and tax revenue for schools,” said NFHA president and CEO, Shanna Smith.
Wells Fargo has pledged to continue to implement best practices for the maintenance and marketing of its REO properties which will be monitored by a third party.
In addition, Wells will enhance its Homeowner Priority program to give owner-occupants higher priority over investors in purchasing REOs until the 15th day a property is on the market instead of the current 12-day period.
Wells will also create a new five-day Homeowner Priority period every time there is a price reduction on a Wells REO home.
Following the terms of the agreement, Wells Fargo and NFHA will sponsor two conferences designed to bring together approximately 100 industry and nonprofit housing and real estate participants and regulatory agencies to discuss fair housing.
Wells will provide another $11.5 million to HUD to support neighborhoods in an additional 25 cities.
“The infusion of targeted resources helps level the playing field between investors and families,” said executive director of Metro Fair Housing Services, Gail Williams, it was “the missing piece to revitalizing” neighborhoods ravaged by foreclosures.
For example, local NFHA partners report that in Indianapolis where foreclosures dramatically increased the number of vacant houses in certain communities of color the funds will be used to rehab vacant REOs to avoid demolitions that result in loss of housing stock.
Another beneficiary is the south Chicago metropolitan area, which according to John Petruszak, executive director of South Suburban Housing Center in Homewood, IL, one of NFHA’s partners, is home to one of the African American communities that suffered “the highest regional rate of foreclosure in recent years, exacerbating the concentrations of abandon properties and economic loss.”
Chicago and its surrounding suburbs continue to experience high foreclosure rates “and lags behind other states in its housing market recovery,” said executive director of HOPE Fair Housing Center in West Chicago, Anne Houghtaling, so these funds will enable HOPE to stimulate homeownership in the hardest hit neighborhoods in the area.
While in the Grand Rapids area, were during the past 6 years one out of every 9 homes in foreclosure, said executive director of the Fair Housing Center of West Michigan, Nancy Haynes, the Wells Fargo investment will help the community plan “how best to emerge from this crisis.”
Executive director of Fair Housing Continuum, Inc. David Baade sees the agreement as “a big step in initiating fundamental changes to the REO industry that other lending institutions can now follow or attempt to exceed.”
NFHA and its members have two similar housing discrimination complaints pending against US Bank and Bank of America, filed in April 2012 and September 2012, respectively. It is NFHA’s hope that other banks will follow Wells Fargo’s lead, Smith said.
