New Accusations That Wells Fargo Targeted Blacks for Subprime Loans

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Thursday, December 31, 2009 at 11:14 am

This time in Memphis. In fact, city officials are so fired up that they’ve filed a lawsuit charging the mortgage-loan giant with discrimination. The New York Times reports:

The lawsuit, filed in federal court in Tennessee, marshaled a raft of statistics to argue that Wells Fargo offered one lending reality for whites and another for blacks. In Shelby County, which includes Memphis, one of every eight Wells Fargo loans in predominantly black neighborhoods resulted in foreclosure, compared with only one in 59 such loans in white neighborhoods, the lawsuit said.

Such charges, if proven, amount to reverse redlining — marketing expensive loan products specifically to black customers.

For anyone who’s been following the reporting of TWI’s Mary Kane on Wells Fargo, this should come as no surprise. First, there was that Cleveland case in which Wells was found to be violating public nuisance laws by failing to clean up its foreclosed properties. Next came the charges from the state of Illinois that Wells had targeted Latino residents for subprime loans, even in cases when potential borrowers could afford less expensive options. Then came the California-based class-action lawsuit alleging subprime discrimination against the bank. And finally, Mary uncovered the bank’s alleged strategy of hiring high-profile black figures such as Tavis Smiley to lure potential black borrowers to “Wealth Building” seminars, where Wells employees would be waiting to sign attendees up for more expensive subprime loans, according to a lawsuit filed by the Illinois attorney general.

Almost seems like there’s a trend here.

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Discrimination in Mortgage Lending? | MCP Help Blog
Pingback posted December 31, 2009 @ 6:04 pm

[...] According to a story in the New York Times, one of the nation’s largest lenders is being sued by government officials in Tennessee for discrimination in mortgage lending. The suit charges that some silly loan agents stupidly steered minority borrowers into more expensive sub-prime and bad credit mortgages than white borrowers. Now (CYA disclaimer follows), this lender may or may not have committed discrimination. And most loan officers at this and other banks are probably not discriminating against applicants.  But, it does happen. So how can you be sure that your lender isn’t being dumb and discriminating against you? Actually, it isn’t that hard. [...]


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Rick
Comment posted January 21, 2010 @ 11:36 am

You are a good guy and loan to a bunch of deadbeats. The deadbeats do not pay their loan payments and now you are a predator?

It is amazing that the Black neighborhoods had more defaults. Duh

It is amazing to some people that ten percent of the Black Male population between 20 and 30 is in jail or prison. Maybe that is why they don't make their payments.


Rick
Comment posted January 21, 2010 @ 11:40 am

Property values dropped more in Black neighborhoods? More of the loans were high risk to begin with? Fewer of the loans had down payments?

Let me see would Black neighborhoods be likely to have higher risk loans and were more high risk loans defaulted on?


Rick
Comment posted January 21, 2010 @ 4:36 pm

You are a good guy and loan to a bunch of deadbeats. The deadbeats do not pay their loan payments and now you are a predator?

It is amazing that the Black neighborhoods had more defaults. Duh

It is amazing to some people that ten percent of the Black Male population between 20 and 30 is in jail or prison. Maybe that is why they don't make their payments.


Rick
Comment posted January 21, 2010 @ 4:40 pm

Property values dropped more in Black neighborhoods? More of the loans were high risk to begin with? Fewer of the loans had down payments?

Let me see would Black neighborhoods be likely to have higher risk loans and were more high risk loans defaulted on?


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