Systemic inequities in the United States have prevented too many minority families from achieving their homeownership and wealth-building goals for too long.
As the largest bank home mortgage originator, and largest bank originator of home loans to minorities over the last decade, Wells Fargo believes it has a responsibility to develop solutions that help close the gap. As a next step in meeting that responsibility, Wells Fargo announced a new initiative to help advance racial equity in homeownership across the country. The company will develop a Special Purpose Credit Program (SPCP) to help minority homeowners, whose mortgages are currently serviced by Wells Fargo, refinance those mortgages.
Initially, through the program, Wells Fargo will identify eligible Black homeowners who could benefit from a refinance product, according to a press release. Wells Fargo will commit $150 million to lower mortgage rates and reduce the refinancing costs to help these homeowners further benefit from refinancing. This program goes beyond the usual lending programs and puts the company’s own money to work refinancing minority families’ homes. The company will assess its progress and will publicly disclose it annually.
Wells Fargo will also:
– Expand its partnerships with the National Urban League and UnidosUS to broaden community outreach efforts for this and other programs, provide homebuying readiness and counseling, and work to eliminate systemic obstacles that prevent many Black and Hispanic customers from achieving their homeownership goals.
– Commit, through the Wells Fargo Foundation, $60 million in “Wealth Opportunities Restored through Homeownership” (WORTH) grants projected to support 40,000 homeowners of color in eight markets that have significant homeownership gaps between white and minority families. WORTH grants will run through 2025 and will fund public-private partnerships that develop and implement plans to address the root causes of those homeownership gaps.
“Wells Fargo has long been a leader in lending to minority families. These efforts are an important next step and will help close the homeownership gap between white and minority families created by decades of systemic inequities,” said Kristy Fercho, CEO of Wells Fargo Home Lending.
“We are taking meaningful action by reimagining the homeownership journey to support minority families in realizing the dream of homeownership.”
In 2020, Wells Fargo was the largest bank lender for home mortgages to Black families. This is consistent with the company’s performance over the last decade (2011–2020) in which it helped as many Black families purchase homes as the next three largest bank lenders combined.
– Wells Fargo helped more Black homeowners refinance their mortgages in 2020 than any other bank.
– The 83% increase in the company’s refinance loans to Black homeowners in 2020 compared to 2019 also was by far the biggest gain among the largest banks.
– In 2021, Wells Fargo increased that total by 106% compared to 2020.
The company is a long-time leader in the housing finance industry:
– Between 2017 and 2021, Wells Fargo has helped more than 425,000 Black and Hispanic families achieve their homeownership goals with $110 billion in financing.
– Since 2019, Wells Fargo has allocated nearly $400 million to help address the housing affordability crisis in the country including homelessness, available and affordable rentals, transitional housing and homeownership.
– Since 2021, Wells Fargo Home Lending CEO, Kristy Fercho, has served as chair of the Mortgage Bankers Association (MBA) and has led the Affordable Homeownership Workstream within the Office of the Comptroller of the Currency’s (OCC) Project REACh, a project to promote financial inclusion through greater access to credit and capital.