Wells Fargo Reaches Agreement with Memphis, Shelby County

In accordance with an agreement made with Memphis and Shelby County, ""Wells Fargo"":https://www.wellsfargo.com/ announced Tuesday it is investing $7.5 million into the area as part of new recovery efforts.

[IMAGE]

Under the agreement, Wells Fargo will provide $4.5 million in grants for mortgage down payment and home renovation assistance. People seeking to buy homes in Memphis and elsewhere in Shelby County may be able to qualify for grants worth up to $15,000 under the Wells Fargo home ownership program. The program starts later this year with a large-scale home ownership event in Memphis.

In order to qualify for the grants, prospective homebuyers must have a family income not above 120 percent of the area median income. They must also complete an eight hour homebuyer education session with an approved non-profit and must agree to live in the home for five years. If the buyer moves out sooner, they have to return a portion of the down payment or renovation grant.

The Memphis program is modeled after Wells Fargo's ""NeighborhoodLIFT"":https://www.wellsfargo.com/mortgage/lift program that has been launched in ""several cities across the United States"":http://dsnews.comarticles/wells-fargo-brings-neighborhoodlift-to-florida-2012-05-17. Partnered with ""NeighborWorks America"":http://www.nw.org/network/index.asp, Wells Fargo created NeighborhoodLIFT to provide education and assistance to potential homebuyers. The bank has also set a five year mortgage lending goal of $425 million for the city and county, including $125 million in home purchase lending to low and moderate-income borrowers.

[COLUMN_BREAK]

Wells Fargo has also agreed to contribute $3 million to help local initiatives and programs designed to improve the economy and preserve public safety for area.

The money and assistance are welcomed by Memphis and Shelby, which have been hit hard by foreclosures in the past few years.

""The condition of the local housing market continues to challenge Memphis and Shelby County significantly, as unoccupied homes and excessive housing inventory weigh heavily on communities,"" said Memphis mayor A C Wharton, Jr. ""We are pleased to announce this collaborative partnership to get more of these houses reoccupied and increase neighborhood stability.""

The agreement comes after months of negotiations and dismisses a lawsuit filed by Memphis and Shelby County against the bank at the end of 2009. The city and county alleged that Wells Fargo was engaging in discriminatory and deceptive lending practices and had violated the Fair Housing Act. According to the filing, the bank sought out African-American customers with high debt and lured them into refinancing their loans with their houses put up as collateral.

The suit alleged that foreclosures in predominantly black neighborhoods were eight times more likely than foreclosures in white communities, even though Wells Fargo gave out four times as many loans in white communities. It also said that Wells Fargo had created a foreclosure crisis in the area that cost the local governments money.

In a motion to dismiss the suit, Wells Fargo said it was being blamed for problems that have existed in Memphis for decades. Even so, the bank decided to reach an agreement to dismiss the case.

""We agreed that it was in the best interests of everyone involved to work together rather than to continue to be involved in a protracted legal fight,"" said Leigh Collier, Wells Fargo regional president for the Mid-South. ""The investment we're announcing in Memphis and Shelby County today continues our ongoing commitment to helping communities succeed across the country.""