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Wells Fargo recently announced a new initiative as part of an extension of their efforts to help Black homeowners.
As part of their Special Purpose Credit Program, the bank will help Black homeowners who are their customers with refinancing their mortgage. By devoting $150 million of their money, Wells Fargo will decrease mortgage rates and refinance costs to help the homeowners who qualify for the program profit more from refinancing, according to a press release.
By working alongside National Urban League and UnidosUS, the bank will also increase efforts to reach out to first-time Black homeowners and Brown homeowners to help them learn the things they need to before taking out a mortgage. With the help of the civil rights nonprofit organizations, Wells Fargo will take steps toward getting rid of the obstacles that prevent Black Americans and Brown Americans from becoming homeowners.
The bank will also invest $60 million in “Wealth Opportunities Restored through Homeownership” grants, otherwise known as WORTH grants, to decrease the gap between the amount of white homeowners and Black homeowners. The grants will go towards creating partnerships that will fix the issues that create this gap and are estimated to help around 40,000 Black homeowners and Brown homeowners.
“Wells Fargo has long been a leader in lending to minority families. 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,” said the CEO of Wells Fargo Home Lending, Kristy Fercho, in the press release. “We are taking meaningful action by reimagining the homeownership journey to support minority families in realizing the dream of homeownership.”
The initiative comes after a lawsuit against Wells Fargo was recently launched. Chris Williams, a Black homeowner who filed the case, accuses the bank of racial discrimination after they charged him higher interest rates than they were supposed to when he went to refinance his mortgage. In an investigation by Bloomberg News, they found that only 47% of Black homeowners at Wells Fargo were allowed to refinance their mortgage compared to 72% of white homeowners.
Since the case was filed in February, two more homeowners have joined the case as well as civil rights attorney Ben Crump.
Discriminatory practices like this are affecting the homeownership rates for Black Americans. According to a report released by the National Association of Realtors earlier this year, while overall homeownership rates increased and more than two million families became homeowners in 2020, the amount of Black Americans who bought a home is lower now than it was in 2010.
At 43.4%, the homeownership rate for Black Americans is not only lower than it was more than a decade ago, but also the lowest out of all the racial and ethnic groups in America. White Americans had the highest homeownership rates at 72.1% with Asian Americans trailing closely behind at 61.7%. Meanwhile, the homeownership rates of Hispanic Americans hit a new record with 51.1% as the percentage rose over 50% for the first time.