Wells Fargo in an agreement on Tuesday that dismisses a lawsuit filed by area officials said it would provide $4.5 million worth of mortgage downpayment and home renovation assistance to certain borrowers in the Memphis region as well as put another $3 million into other local initiatives.
The company said the lawsuit filed jointly by city and county officials in 2010 had alleged improper lending but it denies those allegations. A regional executive said in a press release that the settlement was nevertheless desirable because “it was in the best interests of everyone involved to work together rather than to continue to be involved in a protracted legal fight.”
Leigh Collier, Wells’ regional president for the mid-South, said the move also fits in with Wells’ broader community investment efforts across the country.
Memphis Mayor A. C. Wharton Jr. said in the press release that he hopes the effort will help re-occupy homes and increase neighborhood stability in the City of Memphis and Shelby County. The two areas have unoccupied and excessive housing inventory that challenge them “significantly,” the mayor said.
Shelby County Mayor Mark Luttrell said several efforts are already underway in the area that are aimed at addressing these concerns but “it’s evident more must be done.”
Under the settlement, grants of up to $15,000 each will be available to select homebuyers in Memphis and Shelby County. The buyers must, among other things, meet income and education requirements. They must also agree to certain occupancy terms under a Wells Fargo program set to get underway later this year.
To qualify, homebuyers in the area must have a family income not above 120% of the area median and must complete an eight-hour homebuyer education session with an approved nonprofit organization. They also must agree to live in the homes for five years or return a pro-rated portion of the downpayment or renovation grant.
Wells said the homeownership program is modeled after one previously used in a joint effort by nonprofit NeighborWorks, Wells Fargo Bank NA and Wells Fargo Foundation that has committed to distributing millions of dollars of similar aid in nine other U.S. cities.
In addition to the homeownership program Wells has committed to extend to the city and county, it has pledged to give the additional $3 million in aid to the two local governmental entities in order for them to support at their direction three types of financial programs. These programs must be related to improving the area economy, preserving public safety and increasing financial literacy.
