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Indy organization part of first-ever settlement involving REO properties

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The Fair Housing Center of Central Indiana is one of 13 fair-housing organizations that will split a $27 million settlement from Wells Fargo Bank with the National Fair Housing Alliance after a complaint alleged the bank better maintained its real estate properties in white neighborhoods.

The federal-housing complaint was filed in April 2012 with the U.S. Department of Housing and Urban Development. It alleged that Wells Fargo did not maintain or market its REO properties in African-American and Latino neighborhoods as well as those properties found in white neighborhoods.

REO properties have gone through foreclosure and are now owned by banks, investors, Fannie Mae, Freddie Mac, the Federal Housing Administrator or Veterans Affairs.

The $27 million will assist the NFHA and the fair-housing organizations in promoting home ownership, neighborhood stabilization, property rehabilitation and development in communities of color in 19 cities, according to a release from the NFHA. Under the agreement, Wells Fargo will make it easier to obtain information about REO properties, will implement best practices for the maintenance and marketing of its REO properties, and will develop a fair-housing training program on REO issues for its employees and agents who sell Wells Fargo REO properties.

“Indianapolis has been nicknamed one of the emptiest cities in America due to the number of vacant houses post foreclosure crisis,” said Amy Nelson, executive director of the Fair Housing Center of Central Indiana. “These funds will provide a welcome boost to rehab vacant homes in need in our hardest hit neighborhoods of color and stop any further deterioration into required demolition and loss of housing stock.”

Wells Fargo will end up paying out more than $42 million dollars: An additional $11.5 million will go to support neighborhoods in 25 other cities; $3 million to the NFHA and the 13 fair-housing organizations involved in the complaint for cost and damages; and $550,000 for conferences and seminars.

There are two similar housing-discrimination complaints pending against US Bank and Bank of America that were also filed last year.

 

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