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Wells Fargo, the nation’s third largest bank, announced Wednesday it’s committing more than $200 million to improve minority homeownership through two programs but details of both programs are unknown.
The Wells Fargo Foundation will spend $60 million to help 40,000 prospective minority homeowners buy homes through what it’s calling “Wealth Opportunities Restored through Homeownership,” or “WORTH,” in eight markets that “have significant homeownership gaps between white and minority families,” the bank said in its news release announcing the two programs.
The WORTH program will last until 2025, Wells Fargo said in its news release, but the exact start date is unknown as is the vetting process for prospective minority homeowners, bank spokesman Paul Turner told National Mortgage Professional today.
“We’ll make an announcement at a later date but I don’t when that will be,” he said. Turner described the Foundation as a separate entity from the bank.
Through what Wells Fargo is calling the “Special Purpose Credit Program,” the bank announced it will spend $150 million to help minority homeowners, who have a mortgage with the bank, to refinance their mortgages at a lower interest rate. Funds for this program will come directly from the bank’s home lending division, Turner said.
“Wells Fargo has long been a leader in lending to minority families,” said Kristy Fercho, CEO of Wells Fargo Home Lending division. “These efforts are an important next step and will help close the homeownership gap between white and minority families created by decades of systemic inequities.
“We are taking meaningful action by reimagining the homeownership journey to support minority families in realizing the dream of homeownership,” she added.
The creation of the programs comes after Wells Fargo was sued in March by a Black homeowner in California who claimed the company discriminates against Black applicants.
The law firm cited a Bloomberg News analysis published on March 11 that found Wells Fargo, the third-largest bank by assets in the U.S., approved just 47% of Black homeowners who submitted refinance applications in 2020, compared to 72% of white homeowners.
The bank has said they remain committed to taking action to help close racial equity gaps.
“Minority homeownership and access to financing is a significant problem in this country,” the bank said in its statement last week.
Turner didn’t have a start date for the Special Purpose Credit Program.
In February, Bankrate said Wells Fargo, based in San Francisco, is the country’s third largest bank with $1.8 trillion in assets. The country’s largest bank is JPMorgan Chase with $3.29 trillion in assets, Bankrate said.