WASHINGTON (Legal Newsline) -- Wells Fargo Bank this week agreed to pay out more than $40 million to settle a complaint, filed by the National Fair Housing Alliance last year, that it wasn't maintaining foreclosed properties in minority neighborhoods.
The NFHA, which fights housing discrimination, announced Thursday a conciliation agreement was reached Wednesday.
The agreement is the result of a complaint filed in April 2012 with the U.S. Department of Housing and Urban Development, or HUD.
The complaint alleged that Wells Fargo's REO properties in white areas were much better maintained and marketed by Wells Fargo than REO properties in black and Latino neighborhoods.
REO properties are homes that have gone through foreclosure and are now owned by banks, investors, Fannie Mae, Freddie Mac, the Federal Housing Administration or Veterans Affairs.
In addition to $27 million to promote homeownership, Wells Fargo will pay $3 million to the NFHA and the 13 fair housing organizations for costs and damages, including diversion of resources incurred in connection with the investigations and attorney fees.
Wells Fargo also is committing $300,000 for two national conferences and $250,000 to the NFHA and local fair housing centers to hold seminars and address delinquencies and foreclosures.
The bank also agreed to provide an additional $11.5 million to HUD to support neighborhoods in an additional 25 cities.
Those cities are: Austin, Texas; Bakersfield, Calif.; Detroit; Fort Lauderdale, Fla.; Fresno, Calif.; Houston; Kansas City, Mo; Las Vegas; Los Angeles; Memphis, Tenn; Modesto, Calif.; New York, N.Y.; Phoenix; Riverside, Calif.; Sacramento, Calif; San Antonio; San Diego; San Jose, Cailf.; Santa Ana, Calif.; St. Louis; Stockton, Calif.; Tampa; Vallejo, Calif.; Virginia Beach, Va.; and West Palm Beach, Fla.
"The NFHA is looking forward to working in collaboration with Wells Fargo to make sure that all communities have a chance at a fair recovery," NFHA President and CEO Shanna Smith said in a statement. "We are thrilled to see Wells Fargo's renewed efforts and leadership in this area."
The NFHA and the following 13 fair housing organizations are parties to the agreement: Denver Metro Fair Housing Center, Fair Housing Center of Central Indiana, Fair Housing Center of West Michigan, Fair Housing Continuum Inc., Greater New Orleans Fair Housing Action Center, HOPE Fair Housing Center, Housing Opportunities Project for Excellence Inc., Metro Fair Housing Services Inc., Metropolitan Milwaukee Fair Housing Council, Miami Valley Fair Housing Center, North Texas Fair Housing Center, South Suburban Housing Center and Toledo Fair Housing Center.
The 19 geographic areas included in the agreement with the NFHA are: Atlanta; Baltimore and Prince George's County, Md.; Baton Rouge/New Orleans; Charleston, S.C.; Metropolitan Chicago, south Cook County, Ill.; Oakland and Richmond, Calif.; Dallas; Denver; Dayton, Ohio; Grand Rapids, Mich.; Indianapolis; Miami; Milwaukee, Wis.; Orlando; Philadelphia; Toledo, Ohio; and Washington DC.
"Many neighborhoods across the country have been seriously damaged by the foreclosure crisis, including the impact of REO homes on property values, curb appeal and tax revenue for schools," Smith said. "Our joint efforts will help lay the foundation for the industry to get some of those neighborhoods back on their feet."
The NFHA and the 13 local fair housing organizations were represented by Joseph M. Sellers and Peter Romer-Friedman of Cohen Milstein Sellers & Toll PLLC.
"This groundbreaking agreement is a testament to the fair housing movement's vision and dedication to the promise of equality for all communities," Romer-Friedman said in a statement. "This agreement will ensure that every community shares in the fruits of the housing recovery now underway."
The NFHA and its members have two similar housing discrimination complaints pending against US Bank and Bank of America, filed in April 2012 and September 2012, respectively.
"Other banks should follow Wells Fargo's lead and engage in broad relief to communities damaged by the foreclosure crisis," Smith said. "This is a huge step in the right direction and more is needed to get our neighborhoods, especially communities of color, back on their feet."
To view a copy of the conciliation agreement, click here.
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.