Bay Area homebuyers with low and moderate incomes can get grants under just-approved $100 million Wells Fargo fund
Many Bay Area homebuyers with low and moderate incomes are eligible for thousands of dollars in mortgage help from Wells Fargo, after the bank agreed to set up a $100 million fund to settle claims that it harmed investors by conducting sham interviews with minority job seekers and discriminating against Black and Latino borrowers.
Under a settlement approved by a federal court judge Friday, home purchasers who meet income criteria in Santa Clara, Alameda, Contra Costa, San Mateo and San Francisco counties — and dozens of other areas across the U.S. — are eligible for up to $10,000 in down-payment assistance and up to $5,000 for closing costs if they obtain mortgages through Wells Fargo.
“It’s an important settlement and will have direct, large-scale impacts on a large section of Bay Area residents,” said Mark Molumphy, a lawyer at Burlingame law firm Cotchett, Pitre & McCarthy who represented plaintiffs in the case.
“Home ownership is essential to accumulating wealth going forward.”
Wells Fargo did not respond to the claims of discrimination that led to the creation of the fund, but said it was “pleased to have reached a settlement.”
The down-payment grants are available to households earning a combined 120% or less of the median income in the county where the home to be bought is located. The closing-costs assistance is available to households with a income at or below 80% of the county’s median.
Many people could qualify for both, Molumphy said.
Molumphy called the settlement a “win-win” that would help homebuyers, deliver new business to the San Francisco-headquartered bank, and “hopefully change the internal culture at Wells Fargo for the benefit of its borrowers and shareholders.”
The deal resolves claims in a lawsuit in San Francisco U.S. District Court by Wells Fargo shareholders. They alleged the bank’s board and senior officers breached their fiduciary duty to investors by publicly denying Wells Fargo’s purportedly discriminatory lending and hiring practices, or proclaiming that they were addressing them, while failing to do anything to remedy alleged discrimination.
“These discriminatory practices have affected a significant number of borrowers and job applicants and caused Wells Fargo to endure costly regulatory scrutiny, class action litigation, and reputational harm, among other damages,” the lawsuit, filed in September 2022, alleged.
Among the claims were that Wells Fargo conducted “sham interviews” with minority job seekers. The bank in 2020 had agreed to pay nearly $8 million to settle allegations that it had discriminated against tens of thousands of Black job applicants, the lawsuit noted.
Wells Fargo “pledged to do better” and expanded an internal policy to require that at least half of all interview candidates meet at least one diversity characteristic, the lawsuit said.
“Throughout 2020 and 2021, the company touted its diversity and inclusion efforts,” the lawsuit said.
But while the bank did interview minority candidates, in many cases, the position they sought had already been filled by a non-minority person, Molumphy said.
The lawsuit also took aim at Wells Fargo’s allegedly “discriminatory lending practices.” The lawsuit noted that the bank in 2012 had agreed to pay a $184 million settlement over allegations it charged Black and Latino borrowers higher fees and mortgage rates than Whites, or steered them into subprime mortgages.
Eight years later, Wells Fargo was found to be “a significant outlier among its peers … in terms of originating mortgages to Black and Hispanic Americans,” the lawsuit said.
“Wells Fargo granted a higher percentage of loans to White applicants with yearly incomes below $63,000 than to Black applicants with yearly incomes between $120,000 and $168,000,” the lawsuit said, citing reporting by Bloomberg.
Wells Fargo was also found to be “the only major lender in 2020 to reject more refinancing applications from Black homeowners than it accepted,” the lawsuit said. Just 47% of Black and 53% of Hispanic homeowners who applied with Wells Fargo to refinance their mortgages received approval, compared to 72% of White homeowners, the lawsuit said.
“This disparity appeared to be part of a near decade-long trend,” the lawsuit said, “as Wells Fargo was the only major lender to approve a smaller share of refinancing applications from Black homeowners in 2020 than it did 10 years earlier in 2010.”
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This story was originally published May 18, 2026 at 4:04 PM.