Wells Fargo & Company has set aside a staggering $60 billion to lend to at least 250,000 black homeowners by 2027.
Metropolitan Atlanta’s second-largest bank also pledged to increase the diversity of its home lending sales team and spend another $15 million to give financial education and counseling over the next 10 years.
It’s an admittedly ambitious plan but Wells Fargo officials said they are committed to seeing the initiative through.
“We were looking at homeownership rates in America which had been declining since 2007, and African-Americans in particular were hit hard so we felt like we could do something about it,” said Brad Blackwell, executive vice president and head of housing policy and homeownership growth strategies for Wells Fargo.
“We started to put this together and began thinking about it in earnest in 2016,” he said, noting too that the program would include an equally ambitious financial counseling component. “First, we strongly believe that homebuyer education and counseling are effective ways to help people become ready to buy a home. This investment is important to us as a vehicle to increase homeownership rates.”
The bank will donate funds to housing counseling agencies through the Wells Fargo Foundation where applications are received regularly from programs around the country seeking such grants.
Wells Fargo’s announcement came on the last day of Black History Month during a press conference in Atlanta that was attended by representatives from several organizations including the National Urban League, the NAACP and the National Newspaper Publishers Association, an organization comprised of 211 African-American-owned newspapers and media companies.
“The National Newspaper Publishers Association enthusiastically salutes Wells Fargo Home Mortgage Division for taking steps forward to promote and to advance African-American homeownership,” said NNPA President and CEO Dr. Benjamin F. Chavis Jr. “As we conclude celebrating 2017 Black History Month, it is aspirational for Wells Fargo to offer $60 billion in loan accessibility specifically for African-Americans who want to purchase and own a home.
“This is unprecedented in the mortgage lending space in the United States,” Chavis said. “Millions of African-American families will now be able to strive more effectively to own a home. This is also about economic justice. The NNPA intends to work directly with Wells Fargo to raise public awareness about this new initiative to substantially assist African-Americans to be homeowners across America.”
The banking giant’s commitment was hailed as a direct action to help address the lower homeownership rates in the black community and it follows Wells Fargo’s announcement to address Hispanic homeownership rates in 2015.
Officials said the company’s commitment seeks to increase the diversity of the Wells Fargo Home Lending sales team, and support the effort with $15 million to support a variety of initiatives that promote financial education and counseling over the next 10 years.
“Wells Fargo’s $60 billion lending goal can contribute to economic growth by making responsible homeownership possible for more African-Americans in communities across the country,” Blackwell said. “We are proud to be the first mortgage lender to make a public commitment to help increase African-American homeownership. And, we are grateful for the support of key housing and civil rights organizations, who work alongside us to increase economic prosperity in our communities.”
The company has also pledged to continue to improve diversity of its sales team, including increasing the number of black home mortgage consultants, noting that they’ll dedicate $15 million to support a variety of initiatives that promote financial education and counseling for African-American homebuyers.
“Our objective is to mirror the market that we serve and we’d like to have diversity of the market we’re in,” Blackwell said. “Nationally, it looks like 35 percent of the population are people of color and growing. We started 2016 at 26.5 percent of diversity in our staff and finished the year at almost 31 percent which means we’re making a lot of progress but we still have work to do. We also substantially grew our African-American home mortgage consultant [team].”
The African-American lending commitment is the second initiative from the company’s Housing Policy and Homeownership Growth Strategies group, a Wells Fargo Home Lending team advancing homeownership for minorities, first-time homebuyers and low- to moderate-income customers.
“Homeownership has become an indispensable part of being a full participant in American society,” National Urban League President and CEO Marc H. Morial said in a statement. “An erosion of homeownership rates among African Americans represents not only a devastating financial loss but a barrier to full participation in the American dream.”
Blackwell said he knows the goals won’t be easy to achieve, but Wells Fargo will remain committed.
“They are ambitious, but I’m confident we’ll put everything in this that we can to make it happen,” he said.