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A massive new mortgage assistance program coming from Wells Fargo & Co. could soon help low- and moderate-income homebuyers in more than 50 U.S. areas; and Americans from Atlanta to Seattle can see whether their community made the list.

Wells Fargo has agreed to launch a $100 million borrower assistance program after settling a bombshell lawsuit that accused the company’s board of failing to properly oversee lending practices. The banking giant is being accused of “widespread and systematic discrimination in lending,” according to the complaint.

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The settlement, which was recently approved by a federal judge in California, comes after four years of legal disputes involving Wells Fargo shareholders, former employees and job applicants who accused the bank of systemic problems in both lending and hiring practices.

While Wells Fargo denied wrongdoing, the company agreed to the deal to avoid prolonged litigation and mounting legal costs.

For potential buyers struggling with sky-high home prices, stubborn mortgage rates and steep closing costs, the settlement could be a rare opportunity for financial relief.

The case centered on allegations that Wells Fargo’s board failed to maintain adequate oversight of the bank’s mortgage lending operations, exposing the company to regulatory scrutiny and accusations of discriminatory practices.

According to reporting from Realtor.com, plaintiffs accused the bank of “widespread and systematic discrimination in lending” and cited concerns over lending algorithms and refinancing approval patterns. (1)

The lawsuit stated that Wells Fargo was allegedly the only major lender in 2020 to reject more refinancing applications from Black homeowners than it approved.

Former employees also allegedly raised internal concerns about company culture and lending disparities.

“It’s the culture at the root of the company,” one former employee reportedly told the plaintiffs’ private investigator.

The lawsuit was ultimately consolidated into a shareholder derivative action in federal court in California, meaning shareholders sued on behalf of the company itself, accusing directors and executives of breaching their fiduciary duties. Motley Rice LLC, Cotchett Pitre & McCarthy LLP, and Bleichmar Fonti & Auld LLP were the legal counsel for the plaintiffs.

Under the final settlement: (2)

Wells Fargo will establish a $100 million mortgage assistance fund

The program will run for three years

Directors will pay an additional $10 million to shareholders

Low- and moderate-income borrowers in eligible communities may qualify for mortgage grants and closing cost assistance

Judge Trina Thompson called the program “a meaningful step toward expanding equitable access to financial services.” (1)

“Often, the largest asset a person or family has is a home,” added Motley Rice attorney Marlon Kimpson. “This case alleged Wells Fargo systematically locked out people of color and marginalized families, preventing them from pursuing the American dream. This settlement delivers real, tangible benefits.” (3)

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The borrower assistance programs will be available across various metropolitan areas throughout the country.

Communities eligible for both mortgage assistance grants and closing cost assistance include: (3)

Charlotte-Concord-Gastonia, NC-SC Metro SA

Chicago-Naperville-Schaumburg, IL Metro Division

Dallas-Plano-Irving, TX Metro Division

Denver-Aurora-Centennial, CO Metro SA

Fort Lauderdale-Pompano Beach-Sunrise, FL Metro Division

Fort Worth-Arlington-Grapevine, TX Metro Division

Jacksonville, FL Metro SA

Lakewood-New Brunswick, NJ Metro Division

Los Angeles-Long Beach-Glendale, CA Metro Division

Marietta, GA Metro Division

Miami-Miami Beach-Kendall, FL Metro Division

Minneapolis-St. Paul-Bloomington, MN-WI Metro SA

Montgomery County-Bucks County-Chester County, PA Metro Division

Nassau County-Suffolk County, NY Metro Division

New York-Jersey City-White Plains, NY-NJ Metro Division

Newark, NJ Metro Division

Oakland-Fremont-Berkeley, CA Metro Division

Orlando-Kissimmee-Sanford, FL Metro SA

Philadelphia, PA Metro Division

Phoenix-Mesa-Chandler, AZ Metro SA

Portland-Vancouver-Hillsboro, OR-WA Metro SA

Raleigh-Cary, NC Metro SA

Richmond, VA Metro SA

Riverside-San Bernardino-Ontario, CA Metro SA

Sacramento-Roseville-Folsom, CA Metro SA

San Diego-Chula Vista-Carlsbad, CA Metro SA

San Francisco-San Mateo-Redwood City, CA Metro Division

San Jose-Sunnyvale-Santa Clara, CA Metro SA

Seattle-Bellevue-Kent, WA Metro Division

Tampa, FL Metro Division

Trenton-Princeton, NJ Metro SA

Vineland, NJ Metro SA

Washington, DC-MD Metro Division

West Palm Beach-Boca Raton-Delray Beach, FL Metro Division

Wilmington, DE-MD-NJ Metro Division

Meanwhile, seven additional metro areas will qualify specifically for closing cost assistance only, including: (3)

Albuquerque, NM Metro SA

Cape Coral-Fort Myers, FL Metro SA

Columbia, SC Metro SA

Houston-Pasadena-The Woodlands, TX Metro SA

Las Vegas-Henderson-North Las Vegas, NV Metro SA

Oxnard-Thousand Oaks-Ventura, CA Metro SA

Salt Lake City-Murray, UT Metro SA

The case, formally known as In re Wells Fargo & Co. Hiring Practices Derivative Litigation, is shaping up to be one of the most closely watched banking settlements tied to fair lending practices in years.

And for thousands of would-be buyers who’ve been priced out of the market, the new assistance programs could offer something that’s become increasingly harder to find in today’s housing market: a realistic path to homeownership.

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Realtor (1); Motley Rice (2, 3)

This article originally appeared on Moneywise.com under the title: Wells Fargo must pay $100M to help homebuyers after discrimination lawsuit — 51 cities are eligible

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.