City of Philadelphia and Wells Fargo Resolve Litigation
December 16 2019 - 10:14AM
Business Wire
Reach Collaboration Agreement for $10 million
in Affordable Housing and Housing Preservation Grants
The City of Philadelphia and Wells Fargo Bank, N.A. have agreed
to a resolution of the lawsuit brought in 2017 by the City of
Philadelphia against the bank (City of Philadelphia v. Wells Fargo
& Co., et al., No. 2:17-2203-AB (E.D. Pa.)). The City and Wells
Fargo have reached a Collaboration Agreement under which the
company will contribute $10 million for sustainable housing-related
programs to promote and preserve homeownership for low- and
moderate-income residents.
In the lawsuit, the City alleged that Wells Fargo originated
residential mortgage loans to minority borrowers in Philadelphia in
violation of the Fair Housing Act, causing economic and
non-economic damages to the City. Wells Fargo does not admit
liability and vigorously denied the allegations.
The largest portion of the funds, $8.5 million, will be used to
provide grants for down payment and closing cost assistance to low-
and moderate- income persons and households purchasing homes within
the City. The Philadelphia Housing Development Corporation (PHDC)
will provide the grants through its current program infrastructure.
There is no requirement that the buyer receive a home purchase loan
from Wells Fargo in order to qualify for these grants.
Another $1 million will be divided among up to three non-profit
organizations that implement the City’s Residential Mortgage
Foreclosure Prevention Program (the “Program”). The Program was
developed in the wake of the 2008 financial crisis as a way to
mitigate the effects of the foreclosure proceedings on homeowners,
lenders, and the City. The Program has proven effective in
assisting lower-income and minority residents to remain in their
homes and streamlining the legal process for the court system.
An additional $500,000 in grants will be available to the city’s
land care program, aimed at revitalizing vacant land through
clean-up and greening efforts, such as cleaning and planting
vegetation on abandoned residential lots in Philadelphia.
The benefits of this Agreement go entirely to homeowners and the
referenced not-for-profit organizations. The Wells Fargo funds will
not be used for any other purpose.
Finally, the City and Wells Fargo will collaborate to conduct a
program entitled “Understanding Philadelphia” for employees who
work at Wells Fargo Home Mortgage in the Philadelphia community,
and will include City and PHDC officials and external subject
matter experts. This program will analyze the history of the
housing market in the City, the City’s diverse neighborhoods, and
the current housing needs of City residents.
From Mayor Jim Kenney:
“Home ownership brings stability, security and pride -- in
yourself, and in your community. Philadelphians who struggle amid
poverty need assurance that they face a level playing field as they
work to achieve that dream. This agreement brings substantial
support to the very communities that most need this assistance.
Philadelphia is committed to ensuring that no one faces additional
hurdles toward home ownership because of their race or ethnicity. I
thank Solicitor Marcel Pratt and the Law Department for pursuing
this case and attaining this resolution.”
From City Solicitor Marcel S. Pratt:
“From the outset of this litigation, our focus has been on
directing relief to the neighborhoods that were the subject of the
litigation, which were communities of color that continue to face
challenges. The resolution will provide much needed benefits to the
City’s low- and moderate-income residents—most significantly by
enabling homeownership, which is one of the most effective ways
that families accumulate wealth in America. One of the advantages
of this resolution is that we secured valuable benefits that would
not have been available through pursuing our litigation for City
government’s injuries under the Fair Housing Act. As a result, we
are providing tangible, significant benefits directly to our
communities and residents. We are also pleased that—beyond
financial relief—the City and Wells Fargo will collaborate on a
novel ‘Understanding Philadelphia’ program. Through the program, we
hope to explore new ways to promote increased homeownership in
Philadelphia and remove any impediments that exist.”
From Wells Fargo:
“We’re pleased that we’ve been able to resolve this matter in a
way that will provide real, tangible sustainable homeownership
opportunities for many low- and moderate-income residents of
Philadelphia,” said Joe Kirk, Wells Fargo Region Bank President,
Greater Philadelphia. “The efforts funded by these grants are
consistent with Wells Fargo’s broader philanthropic strategy, which
includes a $1 billion commitment over the next six years to address
the U.S. housing affordability crisis.”
“Over the last decade, Wells Fargo has been the largest provider
of loans to help low- and moderate-income families in Philadelphia
achieve the dream of homeownership, and our efforts have gone well
beyond making loans,” added Kirk. “In 2012 and 2016, for example,
Wells Fargo partnered with City leaders and local not-for-profit
groups for CityLIFT® and NeighborhoodLIFT®, which included more
than $15 million for several initiatives, including down payment
assistance, locally designed programs to meet housing priorities,
local home buying education and support events. The initiatives
helped 662 lower-income families achieve homeownership in
Philadelphia.”
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified,
community-based financial services company with $1.9 trillion in
assets. Wells Fargo’s vision is to satisfy our customers’ financial
needs and help them succeed financially. Founded in 1852 and
headquartered in San Francisco, Wells Fargo provides banking,
investment and mortgage products and services, as well as consumer
and commercial finance, through 7,500 locations, more than 13,000
ATMs, the internet (wellsfargo.com) and mobile banking, and has
offices in 32 countries and territories to support customers who
conduct business in the global economy. With approximately 261,000
team members, Wells Fargo serves one in three households in the
United States. Wells Fargo & Company was ranked No. 29 on
Fortune’s 2019 rankings of America’s largest corporations. News,
insights and perspectives from Wells Fargo are also available at
Wells Fargo Stories.
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version on businesswire.com: https://www.businesswire.com/news/home/20191216005515/en/
For the City: Mike Dunn, mike.dunn@phila.gov, 215-686-6210
For Wells Fargo: Tom Goyda, Tom.Goyda@wellsfargo.com,
314-875-8222; Jim Baum, James.A.Baum@wellsfargo.com,
215-341-0273
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