Knowing About Memphis Part 7-Wells Fargo & Foreclosure Costs

Today in the news was the big announcement that the City got $7.5 million from Wells Fargo. To be honest, $7.5 million doesn't seem like much, considering the civic costs and emotional trauma Wells Fargo inflicted on this city. Some quick numbers, over a 5 year period, Wells Fargo foreclosed on almost 1,200 households in Shelby County, 95% of which were in Memphis. $7.5 million divided by 1,200 gives you a little less than $6,500 a foreclosure. Below is a map of Wells Fargo foreclosures.

You can see they happened in predominantly minority areas of the city and not entirely in areas losing population, one of the primary points of their defense. Memphis and Shelby County hasn't done this but a few years ago the Home Ownership Preservation Foundation did a study in Chicago to figure out all the costs to local government related to a foreclosure. They looked at everything from filing records at the Register of Deeds, to building inspections, to court costs, to a police call, to property tax loss, to fire suppression. The study is called "Collateral Damage: The Municipal Impact of Today's Mortgage Foreclosure Boom". The broke down the combined costs for the 5 likely scenarios that would happen with a foreclosed property. Scenario A cost $430, B $5,358, C $13,452, D $19,227, and E $34,199. If Memphis had a similar matrix to calculate costs, we could see what proportion of Wells Fargo foreclosures fell under each scenario and know if we got ripped off. Lets not forget that Wells Fargo displaced nearly 1,200 families over 5 years. How much stress did that do to those families? How many kids had to switch schools? How much stress did that put on social service providers already swamped in a city with 25%+ poverty rate? Lastly, while today Wells Fargo was happy to stand in front of the camera and talk about how much they wanted to help the community, a couple years ago they weren't so excited to be in front of the camera here in Memphis.