HUD: Wells Fargo to Improve REO Practices in Minority Neighborhoods

HUD: Wells Fargo to Improve REO Practices in Minority NeighborhoodsWells Fargo has agreed to invest $39 million in 45 communities to settle allegations that the lender neglected the maintenance and marketing of foreclosed homes, or REOs (bank-owned properties), in minority neighborhoods.
The U.S. Department of Housing and Urban Development announced the settlement Thursday that stems from complaints from the National Fair Housing Alliance (NFHA) and 13 private fair housing organizations
Abandoned foreclosures that need upkeep can be a problem in minority neighborhoods, in part because of the high concentration of subprime loans that were issued in those areas in the run-up to the housing crisis.
HUD said Wells Fargo also has committed to improving the maintenance and marketing of REO properties after foreclosure.
This includes the use of property inspection checklists and enhanced training for real estate brokers and agents who list REO properties. Wells Fargo staff members who are responsible for managing REO will also take the training.
In addition, Wells Fargo will extend the amount of time that individual REO properties will be exclusivelyavailable for purchase by an owner-occupant or a non-profit organization. This should increase the chance that the house will be acquired by an owner-occupant.
“HUD, NFHA and Wells Fargo are committed to revitalizing and creating homeownership opportunities in minority communities devastated by foreclosures,” said Bryan Greene, HUD General Deputy Assistant Secretary for Fair Housing and Equal Opportunity.
Under the agreement, $27 million will be used to support neighborhoods in 19 areas through NFHA and its member organizations. Those cities are Washington, DC; Baltimore, MD; Philadelphia, PA; Oakland, Richmond, and Concord, CA; Dayton, OH; Miami, FL; Dallas, TX; Grand Rapids, MI; Atlanta, GA; Prince George’s County, MD; Charleston, SC; Orlando, FL; Indianapolis, IN; Milwaukee, WI; Metropolitan Chicago, IL; Homewood and Dolton, IL; Toledo, OH; Denver, CO; and Baton Rouge, LA.
A separate agreement calls for the investment of $450,000 in Jacksonville, Florida to be administered by the Jacksonville Area Legal Aid, Inc.
An additional $11.5 million will support neighborhoods in an additional 25 cities. Those cities are Austin, TX, Bakersfield, CA, Detroit, MI, Fort Lauderdale, FL, Fresno, CA, Houston, TX, Kansas City, MO, Las Vegas, NV, Los Angeles, CA, Memphis, TN, Modesto, CA, New York, NY, Phoenix, AZ, Riverside, CA, Sacramento, CA, San Antonio, TX, San Diego, CA, San Jose, CA, Santa Ana, CA, St. Louis, MO-IL, Stockton, CA, Tampa, FL, Vallejo, CA, Virginia Beach, VA, and West Palm Beach, FL.

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