(Source: Associated Press)
WASHINGTON
(AP) — Wells Fargo Bank will pay at least $175 million to settle
accusations that it discriminated against African-American and Hispanic
borrowers in violation of fair-lending laws, the Justice Department
announced Thursday.
Wells
Fargo, the nation's largest residential home mortgage originator,
allegedly engaged in a pattern or practice of discrimination against
qualified African-American and Hispanic borrowers from 2004 through
2009.
At
a news conference, Deputy Attorney General James Cole said the bank's
discriminatory lending practices resulted in more than 34,000
African-American and Hispanic borrowers in 36 states and the District of
Columbia paying higher rates for loans solely because of the color of
their skin.
Cole
said that with the settlement, the second largest of its kind in
history, the government will ensure that borrowers hit hard by the
housing crisis will have an opportunity to access homeownership.
The
part of the settlement for $125 million deals with mortgages that were
priced and sold by independent mortgage brokers through Wells Fargo's
wholesale channel. The financial institution said that it is
discontinuing financing mortgages that are originated, priced and sold
by independent mortgage brokers through the mortgage wholesale channel.
"Through
our separate decision to no longer fund mortgages through independent
mortgage brokers, we can control how that commitment" to serving home
ownership needs "is met on every mortgage that Wells Fargo makes," said
Mike Heid, president of Wells Fargo Home Mortgage.
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