01 Jun 2012
- Written by Tri-State Defender Newsroom
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Shelby County Mayor Mark Luttrell called it a rare event that proves everyone benefits when the goal is collaboration.
Mayor A C Wharton Jr. noted that the City of Memphis and Shelby County are collaborating with Wells Fargo bank on "a new partnership that will bring stability and renewed prosperity to some of our community's hardest-hit neighborhoods."
And attorney Webb Brewer, who was on the ground floor of the multi-million lawsuit accusing Wells Fargo of lending discrimination, said that while he is pleased, the hardest part – enforcement of the settlement – likely still is ahead.
All of this flowed in the wake of an agreement officially made public on Wednesday.
As the day unfolded, Wharton and the regional president of Wells Fargo Bank, Leigh Collier, visited near Prospect and McKellar in South Memphis to announce a deal had been made to dismiss the multi-million dollar predatory lending lawsuit filed by the city and county in January 2010, alleging the bank discriminated against minorities.
"Under the terms of our new agreement, Wells Fargo will invest $425 million in new home loans in our community, with $125 million of those dedicated specifically to low-income and moderate-income families," Wharton said.
"Wells Fargo will also make $4.5 million available in grants to first-time home purchasers, as well as an additional $3 million for a variety of programs related to financial literacy, home buyer counseling, and small business development."
Collier stressed that, "There's also going to be financial literacy to help with making the payment, caring for the home, etcetera."
Wharton said he was confident that Collier and Wells Fargo understand that there is so much work left to do to rebuild the neighborhoods that were devastated by the foreclosure crisis of the past several years.
" With Wells Fargo's support, we are on a path to help many, many Memphians realize the dream of homeownership for the first time, building the foundation for a strong, prosperous city moving forward."
More details would be forthcoming, he said, later adding that favorable timing was crucial to the resolution.
"Wells Fargo saw an opportunity to extend its spirit of partnership and, hey, it came together," Wharton told the media.
Here are some details that are known:
Wells Fargo will set up a homeownership program that would make $15,000-max grants available to those interested and qualified to buy a home.
A family income below 120 percent of poverty of the area median income is required of prospective homebuyers.
An eight-hour home education session is required. This must be with an approved nonprofit group.
Eligibility includes living in the home for five years.
"Like the City of Memphis, the County will use money from the agreement to initiate housing assistance initiatives and address blight in areas affected by the foreclosures," said Luttrell.
"The agreement signifies an important step in our ability to sit down with businesses like Wells Fargo and find a workable solution to a major problem that affects thousands of people throughout Shelby County."
Brewer, a partner in the law firm of Brewer & Barlow, which specializes in social justice and civil rights issues, along with his partner, Steve Barlow, initially represented Memphis and Shelby County in the discriminatory lending lawsuit against Wells Fargo.
"We (Memphis and Shelby County) were sort of like at a fork in the road because this was going to be a long and grueling litigation. I feel, and always did, that we could have been successful (with the suit) and in the end we were in getting past dismissals and all of that," said Brewer.
"Still there is an awful lot of time and expense involved and I think it's a sensible decision to try and get the most relief that can be gotten now for people in Memphis that are in need. Who knows where a lot of those people would have been in five to seven years when the case would have wound it's way to conclusion."
Next up is getting "meat on the bones" of the terms of the settlement, he said.
"It (foreclosure) continues to be a big problem. I do think this is a big help," said Brewer. "There are a number of other things, like the agreement between the Justice Department and the states attorney generals, there have been a number of private lawsuits or governmental actions. No one of them is like a panacea or solution to everything, but I hope that all of them kind of put together like a quilt is changing the situation a great deal. A lot of these agreements, like the one just reached here in Memphis, are brand new. So how effectively they end up being – I am optimistic, but you don't know."
From past work, enforcing a settlement is probably the hardest part of it, said Brewer.
"At least there is a lot happening right now in terms of new protection for consumers, new relief," he said.
"It's still a big uphill thing and you know, unfortunately the blighting that's happened, it is going to take a whole lot to reverse the damage that has been done in neighborhoods."