(Reuters) – Wells Fargo & Co (WFC.N) on Wednesday announced a pilot program to stimulate home buying in Los Angeles and Atlanta, which were drubbed by the U.S. financial crisis.
The fourth-largest U.S. bank and largest U.S. mortgage originator said it would donate $23 million toward downpayment assistance programs this year and plans to make $11.8 billion in home-purchase loans over the next five years in the two cities.
“We are not going to solve the housing crisis alone, but we think this is an opportunity to take a leadership position,” said Jon Campbell, Wells Fargo head of social responsibility.
Wells Fargo said that next month it would also hold events such as tours of homes for sale in Los Angeles and Atlanta.
The program aims to show that financing is available for home buyers at a time of low prices and excess inventory, Campbell said.
He said the lending goal is based on past originations in the two cities. The downpayment assistance will be made available through NeighborWorks America, a nonprofit organization. Borrowers do not have to use Wells Fargo for their loans to receive the assistance.
Wells Fargo is one of the lenders in negotiations with state and federal officials to settle an investigation of foreclosure-related abuses. Campbell said the bank remains focused on helping homeowners stay in their homes.
Wells Fargo originated $357 billion in residential real estate loans in 2011, down from $386 billion in 2010.
(Reporting By Rick Rothacker; editing by Mark Porter)