Racial bias

The municipality and the bank have been at odds over similar issues in the past, and no agency currently has deposit accounts with the lender.

Wells Fargo won an early round in a lawsuit accusing the bank of running a predatory mortgage lending scheme in the Atlanta area before the 2008 financial crisis and continuing to discriminate against minorities for more than a decade afterward.

Lawmakers also asked officials to include more perspectives from Veterans Affairs and USDA representatives and increase focus on manufactured home valuations.

The actions involved are based on findings by an interagency task force first convened last year by Marcia Fudge, secretary of the Department of Housing and Urban Development.

The class action complaint comes after U.S. senators called on regulators to investigate the bank’s alleged treatment of minority homeowners.

An audit found that mostly wealthy, white homeowners in urban counties were benefiting from the century-old policy.

This follows the publication last week of an investigation that found that the bank had in 2020 approved only 47% of applications to refinance mortgages completed by Black homeowners compared with 72% of those from White applicants.

Mortgage companies can open doors to homeownership for more minorities by incorporating low-down-payment financing options; closing cost credits; down-payment assistance; diverse, in-market sales teams ready to provide access and support; and more, writes the chair of the Mortgage Bankers Association.

The complaint seeks unspecified damages over the bank’s mortgage origination and underwriting practices, alleging minority homebuyers were excluded from affordable, low-risk loans.

Housing rights advocates said minority home-buyers and homeowners in 39 U.S. metropolitan areas will receive the funds as a result of a legal action alleging racial discrimination in the government-sponsored enterprise's foreclosure practices.