To help “stabilize housing markets” over the next five years Wells Fargo will invest $10.5 billion in Los Angeles and $1.3 billion in Atlanta through an initiative that aims to expedite bank-owned property sales and foreclosure prevention options.
“Neighborhood LIFT” is designed to support “sustainable homeownership in cities deeply affected by the crisis” where the inventory of foreclosed and vacant homes is significant, the bank said.
In 2012 Wells Fargo plans to invest $15 million in down payment assistance and homebuyer support programs in Los Angeles and another $8 million in Atlanta.
In February and further on this year Wells Fargo will continue to offer its signature in-person Home Preservation Workshops, to homeowners seeking to avoid foreclosure, in cooperation with NeighborWorks America and other non-profits. Over 24 workshop events are planned to take place in locations scattered across the country.
The initiative, which will address “the dual challenge of high inventories of unsold homes and attracting prospective buyers,” is initiated in Los Angeles and Atlanta because they feature high concentrations of homeowners, foreclosures, delinquencies, and REO properties.
The funds will be used for downpayment assistance, home and renovation financing, and homeownership education and marketing of properties available for sale.
According to Wells Fargo’s head of Social Responsibility, Jon Campbell, ' will expand the bank’s foreclosure prevention outreach efforts and start new collaborations with cities and nonprofits as a way to support neighborhood revitalization “and inspire others to join efforts to support our nation’s economic recovery.”
Executives at NeighborWorks America, the nonprofit that will oversee the application and training processes for grants funded by the Wells Fargo Foundation and homebuyer education also see this kind of public-private collaboration as the best strategy to help communities “tackle difficult challenges.”
In 2011 Wells Fargo provided over $213.5 million to 19,000 non-profit organizations, including $23.4 million through 52 nonprofits that signed up for the Leading the Way Home Program Priority Markets Initiative designed to help purchase and redevelop foreclosed and abandoned properties in dilapidating neighborhoods. Also in 2011 the bank increased its commitment to credit and housing counseling agencies to $12.4 million, up 35% from $9.2 million in 2010.
These efforts helped reduce the delinquency and foreclosure rate on Wells Fargo Home Loans’ first mortgages and home equity loans-- as of September 2011 it dropped to 7.63%, below the industry average of 10.70%.
