Wells Fargo, â€śthe largest single family mortgage lender in the United States,â€ť is about to pay out $125 million for allegedly â€śplacing black and Hispanic applicants in the subprime mortgage lending channelâ€ť for the years 2004-2008.
In what has been called â€śthe second largest loan settlement in the Department of Justiceâ€™s history,â€ť Wells Fargo agreed to a quarter of a billion dollar pay-out to silence charges that they â€śengaged in a pattern of discrimination on the basis of race and national origin in residential mortgage lendingâ€ť in violation of the Equal Credit Opportunity and Fair Housing Acts. Wells Fargo, who maintains that their company never disqualified any applicants on the basis of race or religion, claimed the settlement was nothing more than an attempt to avoid litigation with the Department of Justice.
According to Wells Fargo, their biggest shortfall in the caseâ€”the discrepancy between their own numbers and those calculated by the Department of Justiceâ€”can be attributed to the fees charged by the individual mortgage brokers who work in conjunction with their company. Once those fees are properly assessed, says Wells Fargo, the disproportionate rates are easily understood; thus it is in an attempt to move on with business and put the matter behind them that they have agreed to settlement at all.