The U.S. Department of Housing and Urban Development (HUD) has opened an investigation into Wells Fargo’s mortgage programs that aim to boost Black homeownership rates, saying the initiatives may violate the Fair Housing Act.
HUD is focused on Wells Fargo’s 2017 and 2022 commitments to increase homeownership among Black borrowers and to advance racial equity in homeownership through a Special Purpose Credit Program (SPCP).
“Even if Wells Fargo did not violate the law, its practice of dividing Americans based on race is immoral, unethical and un-American,” HUD Secretary Scott Turner said in a statement. “Wells Fargo and all of its employees that engaged in race-based decision-making should be ashamed of themselves.”
A Wells Fargo spokesperson did not immediately reply to HousingWire‘s request for comments.
In February 2017, the bank committed to lend $60 billion to qualified African American consumers for home purchases by 2027. In 2022, it announced new efforts, including $210 million to advance racial equity in homeownership and $150 million to lower mortgage rates and refinancing costs, following a Bloomberg investigation that found the bank approved fewer than half of Black applicants for a home refinancing in 2020.
In a letter to Wells Fargo CEO Charles Scharf on Wednesday, Craig Trainor, HUD’s assistant secretary for fair housing and equal opportunity, said the department is investigating the bank’s “mortgage lending policies, practices, and programs” under Section 805 of the Fair Housing Act. The probe is being led by HUD’s Office of Special Investigations.
“The Fair Housing Act forbids racial discrimination in housing. It does not say: discriminate, so long as the discrimination is called a ‘special purpose credit program’ and justified as advancing ‘racial equity in homeownership,’” Trainor said in a statement.
HUD’s letter cites the bank’s 2023 diversity, equity and inclusion (DEI) report, which framed its efforts as closing gaps between Black, Hispanic and white homeownership rates, and its disclosure that it exceeded the $150 million Special Purpose Credit Program commitment.
In his letter to Scharf, Trainor said Wells Fargo’s public statements and commitments “over an extended period” raise questions about whether the bank “continues to make loans and craft their terms according to the race of the applicant,” despite removing explicit DEI language from its website in 2025.
Trainor cited public records, including archived DEI reports and coverage of Wells Fargo’s quiet rebranding of DEI as “inclusion and accessibility,” as a basis for HUD’s concern.
HUD’s Office of Special Investigations will examine whether Wells Fargo “has violated or intends to violate” the Fair Housing Act’s ban on discrimination in residential real estate-related transactions because of race or national origin. Depending on the findings, the Office of Fair Housing and Equal Opportunity could file an administrative complaint or refer the matter to the Department of Justice for enforcement.
HUD also directed Wells Fargo to preserve “all existing and future records and materials related to your mortgage lending policies, practices, and programs,” including emails, texts and other electronic messages sent from personal devices and accounts.
Wells Fargo, once the largest depository mortgage lender in America, announced in early 2023 that it would exit the correspondent channel and shrink its servicing portfolio as part of a strategic pullback from the broader mortgage market.
From January to June of this year, it was the 15th-largest mortgage lender in the country, with $15.3 billion in volume, up almost 30% year over year. Over the same period, it had a $603 billion owned servicing portfolio, the sixth-largest in the nation, according to Inside Mortgage Finance.
