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After Paying $125 Million-Dollar Settlement For Predatory Lending, Wells Fargo Helps Rebuild Foreclosed Homes

financialjuneteenth.com | April 26, 2015

The Pittsburgh neighborhood in Atlanta was one of the areas worst hit during the housing bubble in the United States, with many homes in the area entering into foreclosure. Now, Wells Fargo, Invest Atlanta, and the Annie E. Casey Foundation want to give people the opportunity to own some of these foreclosed homes which they plan to renovate.

Rolling Out reports the partnership between these three organizations will make investments totaling around $2.5 million to restore 53 homes in Pittsburgh, a neighborhood near Turner Field and next to the Atlanta BeltLine. The renovated homes will then be sold to interested individuals, couples, and families in an effort to transform the area into a “vibrant, thriving community for kids and families.”

Wells Fargo will invest $1 million in the rehabilitation project; Invest Atlanta will put in $700,000, and the Casey Foundation will contribute $750,000 over a period of three years. Although the initial total investment is just about $2.5 million, the cumulative total of investments in the project is expected to exceed that amount, especially since Wells Fargo and Invest Atlanta investments will function as a revolving fund – money realized from rehabilitated home sales are invested in renovating more homes.

The $1 million from Wells Fargo is the institution’s first equity equivalent investment (EQ2) in the Atlanta area and attracts a 2% interest rate, which is below the prevailing market rate, with repayment spread out over several years. Invest Atlanta is making its investment from its own Housing Opportunity Bond program.

The Casey Foundation has been actively involved in the Pittsburgh area for a long time. Set up by UPS, the entity, in collaboration with the Pittsburgh Community Improvement Association (PCIA), is currently working on rehabilitating and selling 33 homes in the area. In addition, the foundation has obtained extra funds from the federal HOME Investment Partnerships Program to rehabilitate the 53 homes.

“Having more than 50 families, couples and singles move into these newly renovated, energy-efficient homes will create a critical mass of activity,” said Denis Pellerin, one of the developers contracted by the Casey Foundation. “This will attract more redevelopment and give people confidence that Pittsburgh can fulfill its potential as a thriving neighborhood.”

Wells Fargo is the sole lender that has agreed to make funds available for the 33 homes put on sale by the PCIA. The community land trust model being implemented by the association, which allows buyers to pay only for the home while the land is retained by the association, will help make the renovated homes more reasonably priced.

One could argue that Wells Fargo is trying to reclaim the trust of the community with its involvement in this project. It was just a few years ago that the Department of Justice (DOJ) filed a $175,000,000 lawsuit against the company for allegedly charging some minorities higher rates and fees on their home loans which is a practice known as predatory lending.

Although the bank denied the DOJ’s claims, it agreed to pay $125 million to those the bureau believes were adversely impacted by the bank’s lending practices. Another $50 million was earmarked for homebuyer assistance programs in communities across the country that were hit hard by the housing crisis as well as those that were disproportionately impacted by the alleged discriminatory lending practices.

In 2014, Cook County, the largest county in the state of Illinois, filed a $300,000,000 lawsuit against the bank for predatory lending. Tom Goyda, a spokesman for the San Francisco-based bank, in an e-mailed statement called the county’s case “baseless” and said Wells Fargo would vigorously defend itself.


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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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