Is Wells Fargo Racist About Foreclosure Practices?

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The National Fair Housing Alliance has charged that Wells Fargo & Co. (NYSE:WFC) and member financial organizations have discriminated against minority neighborhoods by failing to maintain foreclosed properties there.

The foreclosure mess is no stranger to hyped up headlines – including recent reports that Bank of America (NYSE:BAC) has sued itself over a particularly tangled foreclosure case. Citigroup (NYSE:C), JPMorgan (NYSE:JPM) and other financial stocks have had headaches, too.

But the claim of racism at Wells Fargo is worth noting, in part because of the seriousness of the complaint. Allegations were filed earlier today with the U.S. Department of Housing and Urban Development thanks to “an undercover investigation of Wells Fargo’s bank-owned properties that found foreclosed properties in White areas are much better maintained and marketed by Wells Fargo than such properties in African-American and Latino neighborhoods.”

A full press release on the allegations is here.

This may sound like a knee-jerk reaction, but apparently almost 220 foreclosed properties owned by Wells Fargo were part of the study. Regions include Atlanta, Baltimore, Dallas and Miami, among other locations.

“Wells Fargo’s REO (real estate-owned, another term for “bank owned”) properties in communities of color were far more likely to have several deficiencies in maintenance or marketing than REO properties in predominantly White communities,” according to the claims.

Wells Fargo has fared better than some of its counterparts in the financial sector, but clearly is not immune to the many troubles of the mortgage crisis. Whether it is overwhelmed, lazy or truly discriminatory has yet to be proven — but it’s obvious that we haven’t heard the last of ugly foreclosure headlines, for Wells or any other bank stock.


Article printed from InvestorPlace Media, https://investorplace.com/2012/04/is-wells-fargo-racist-about-foreclosure-practices/.

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