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City sues Wells Fargo
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Related Topics: BALTIMORE
BALTIMORE (Map, News) - Hundreds of foreclosed homes in black neighborhoods resulting in millions of dollars of tax losses are the result of predatory lending, argues a federal lawsuit to be filed today by Baltimore City against one of the country’s largest mortgage lenders.
The lawsuit accuses Wells Fargo Bank of targeting black homeowners in Baltimore with high-interest loans and deceptive lending practices, costing the city millions in tax dollars and resulting in one of the highest foreclosure rates of any lender in the city.
“We can make the case that African-American homeowners were targeted by Wells Fargo with inferior mortgage products, and we have evidence that some of this practice may be illegal,” Sterling Clifford, spokesman for Mayor Sheila Dixon, said Monday.
Citing “reverse redlining,” the suit alleges the bank targets black neighborhoods. The practice resulted in a foreclosure rate for the bank four times higher in the city’s predominantly black neighborhoods compared to white neighborhoods, the suit alleges.
“The practice of targeting African-American neighborhoods has been costly for the city and its residents,” Clifford said.
According to Mortgage Daily, a trade publication, Wells Fargo originated $79 billion in residential mortgages in the fourth quarter of 2007, making it the county’s second-largest mortgage lender.
In a response e-mailed to The Examiner, Wells Fargo spokesman Kevin Waetke said: “Race is not a factor in our pricing. We do not tolerate illegal discrimination against or unfair treatment of any consumer. Our loan pricing is based on credit risk. We are committed to serving all customers fairly...,” the statement said.
Since 2000, Wells Fargo has foreclosed on 313 homes in Baltimore, the suit says.
“We’re glad that the city is joining the fight against predatory lending. It’s destroying our community and our city,” said Stuart Katzenberg, ACORN’s head organizer for the Baltimore chapter. ACORN’s national affiliate settled a predatory lending lawsuit against Wells Fargo in 2006.
sjanis@baltimoreexaminer.com
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Examiner Reader said:
I am experiencing the trickery of Wells Fargo and their affiliates here in Texas. I was in a fixed rate mortgage townhome as a single mother of two, with one son in college and the other with mental challenges. As a single parent (and particularly, single black because of the job market), you're always struggling. The moment Texas approved home equity lending, I was bombarded by solicitations from Wells Fargo. I bit at one right before the Holidays with the guy telling me he could put me in a lower interest rate fixed in 30-45 days, NO PROBLEM! Each time I checked with him, he assured it was just taking a little longer. He led me on with assurances through the holidays and I got into debt relying on his repeated assurances. Then he Fed-Exed me a loan that was a hard ARM which I refused,though desperate. Then he sent another one that was also an ARM-soft; that I took because I was now,even more desperate. THEY ARE SNAKES! SOMEBODY PLEASE CHOP THEIR HEADS OFF!!
0 agree | 1 disagree
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Examiner Reader said:
I consider myself an educated consumer, however; there are sneaky lenders out there, and they make everything look perfect for you. Then they cut your appraisal, change the terms, don't pay anything off, and they do this right before the closing. I was backed into a corner when PrimeLending, A PlainsCapital Co. did this to me. They waited until the closing to show that it was an ARM not a fixed. But, because they delayed so many times, I was kind of forced to sign because of the timing. They told me I could refinance out of it, and of course, because no other debt was paid off, I couldn't. Oh, let's not forget that they told me that AT THE CLOSING. Six months after I closed, I found out that they weren't licensed to do business in MA. The law states upon public policy that the loan is null and void. I am now battling them in court. Lots of little things keep poppinng up, like forged docs, and lies about all of their actions. Do yourself a favor and stay away from them.
32 agree | 20 disagree
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Examiner Reader said:
At the end of the day you need to pay for what you have, don't buy it if you can't afford it and if you don't pay for it you can't keep it. Again Shelia not dealing with the root problem only adding to it by setting a good example.
51 agree | 18 disagree
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Examiner Reader said:
Stupid is as stupid does, Sheila.
17 agree | 19 disagree
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Examiner Reader said:
I love "deceptive lending practices". Translation - stupid buyers who think they are getting something for next to nothing. Oh well - wasn't it the liberal Democrats who constantly derided the lack of mortgage activity in the black 'community'? Turns out the people in this 'community' are too stupid to know what they're doing.
51 agree | 18 disagree
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Examiner reader said:
First I do not live in the city but I do have a loan through Wells Fargo. The company if full of condescending jack@##^& they need a attitude adjusment. Maybe this lawsuit will do just that but still every employee especially the males need a attitude adjustment.
52 agree | 22 disagree
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Outraged said:
First let the city SUBTRACT all the REVENUE it TOO partook in in the sale/refinance of the property before you pay them back for their expenses due to forclosure. Baltimore City was a ghost town riddled with crime, drugs, vacant houses etc. BEFORE the boom and I find as a Realtor that now places I would not dare drive in nice, law abidding, citizens are buying and therefore investors are fixing up. I think this is all biased hogwash. I think the article failed to mention how Baltimore City is one of the poorest cities in the USA, it is predominantly black to begin with so I guess the city of baltimore is saying they do not want poor black people to own a home and I am outraged by this! The city is also saying all lenders stay away from the city and do not lend to our poor, our black, our people who live in Baltimore city. If no one lends there then besides it being illegal to redline it will also BRING BALTIMORE CITY DOWN with more BLIGHT with the ridiculous LAWSUIT!Thanks Sheila
36 agree | 21 disagree
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Fridley Wallheimer said:
I thought ballon payment meant that I would get ballons and flowers if I wasn't more than 2 weeks late on my house payment.
16 agree | 20 disagree
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Examiner Reader said:
This is nothing more than a shakedown. More foreclosures in black neighborhoods than in Roland Park? Big surprise! Everyone knows these loans are based on mathematical formulas and not race. On Fox news they have a woman complaining that a mortgage went from $600 to $800. You can't even rent a whole house for $800 in most neighborhoods.
25 agree | 20 disagree
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Examiner Reader said:
These people were trying to get something for nothing. Big houses they could not afford, even little ones on no income etc - BS about signing papers and not being told. All you dummies should know by now to read before you sign. Blame it on everyone else except yourselfs. Not you want us to pay the bill for you. Get lost.
23 agree | 18 disagree
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YOU ARE CONFUSED 6:16 said:
The loan officer put me in an "option arm" loan and didn't explain that the payment was based off of an amoritized amount. The numbers did ad up the way she explained it- so I had little reserve not to believe her. I learned a lesson- and now I own three homes...and a lot of understanding of how this works. I did find out though, I was not the only peron in anne arundel county she did this too- actually she is being sued now. It was my first house- I was an anxious, eager young buyer who trusted someone who was obviously dirty- give me a break!
21 agree | 21 disagree
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Huh? said:
Why would you think you could by a $325k house and pay $200/mo.
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YOU ARE CONFUSED 6:16 said:
6:16- this is not always the case- I am a middle class, college educated white female in my 20's- a few years ago I bought my first home. The Loan Officer I used was a close family friend (so I thought) she explained to me that b/c of the program she put me in (perfect credit, full doc, etc..) I could easily afford a 325k house (which was WAY over my original seeking price of 175-200k). I though that was perfect! She explained that I culd pay a minimum payment of only $200+ a month for this house- even better! And any questions I had she easily explained away- even when i had docs saying otherwise. Maybe I was naive in believing her- but let me tell you what a HUGE shock it was to find my payment was over $2,600!!! I lost my house- but hey at least she made her 9,000 paycheck off of me! So, this is not a case of race cards- but greed lenders and loan officers. Best of Luck to those also taken advantage of- I read ALL paperwork, asked vital and still got taken...
22 agree | 26 disagree
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Examiner Reader said:
These people took mortgages they didn't understand and chose not to read the entire mortgage documents. They wanted something they couldn't afford in the first place and now they are paying the price. If this city props up unstable mortgage holders, what is it saying to the rest of us who buy only what we can afford, do all of the research before spending our hard-earned money, and pay our outrages property taxes on time? What does it say about the American dream? Is it all about greed these days?
19 agree | 23 disagree
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Jeff, an Independent said:
I find it interesting that the mayor is attempting to redirect attention away from the incidents of race on MTA. All this amounts to is more smoke and mirrors from Mayor Dixon.
24 agree | 19 disagree
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Examiner Reader said:
No bank wants to foreclose on a home. When the customer cannot pay everybody looses. It does not matter if you are black or white, young or old, or any number of different ways to classify people. Everybody gets the same loan. Banks can only look at credit. Baltimore city needs to take resposability and work on developing the economy so everybody in the city has a chance at a job that will pay them a decent wage so they can afford their bills. Also better schools will lead to smarter students who will have better jobs and credit scores. It is not about color. Excuses. Writer below is correct. Damn if you do and damn if you dont.
22 agree | 20 disagree
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Examiner Reader said:
Here's a question for Wells Fargo. On average, about 50% of homes that go into foreclosure do so without the owner ever attempting to contact the lender in advance. What is the percetage of owners that contacted the bank in advance of foresloure -- My guess is that the number is closer to 90%.
57 agree | 19 disagree
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Examiner Reader said:
I think any court will find this craziness as a frivolous suit. WF should then seek to recover their legal costs for defending themselves against such idiocy. The slip-n-fall, easy money-for-nothin mentality is what I've come expect in the wake of an accident involving an MTA bus, not the action taken by city government to mitigate the loss of tax revenue.
51 agree | 24 disagree
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Examiner Reader said:
I think "predatory lending" is just a liberal invention. If you take out a loan isn't it your job to understand the terms? The sub-prime market was a way for low-income people to buy houses. Isn't that what libs want? These liberal activists seem to want it both ways. Now there will be no loans to anyone who isn't super-qualified. Just another example of how liberals don't understand economics or reality.
51 agree | 18 disagree
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Examiner Reader said:
it is always the race card in the city that breeds and bleeds. when will sheila dixon have her turn at the garmatz federal building? she can room with mary pat bromwell.
22 agree | 21 disagree
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Examiner Reader said:
funny that the article starts out with "hundreds of foreclosed homes...are the result of predatory lending".. i am a mortgage broker and the last time i checked, foreclosures are a result of not making a monthly mortgage payment. enough already.. take some responsibility for your actions and stop feeling sorry for yourselves because youre black.
23 agree | 18 disagree
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Examiner Reader said:
Look, city government, along with so called black leaders, are the ones who solicited banks to grant mortgages in black neighborhoods. Recall, from 2000 onward, the was a push to get mortgages to low income areas to boost pride of ownership. The city put pressure on banks to lend!! Had Wells Fargo denied these mortagages at the time, I promise, the city would have been to first to criticize them. Little surprise now, but the loans were not paid back and Wells Fargo is left holding the bag. This law suit should put Banks on notice -- THINK TWICE BEFORE LENDING MONEY IN LOW INCOME AREAS! -- IT's JUST NOT WORTH IT!!
53 agree | 19 disagree
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Mortgage Lender said:
If Wells Fargo would not loan to these people who would? I'm sure that there are many 1000's that took out these loans, still own their homes, and will stay in them. The company made loans no one else would and enabled many more to own homes. This suit will just make mortgage lenders think twice about making loans in MD. Think it's hard to sell your home now, wait till standards in lending get even tighter. Foreclosure is not just an urban black issue it is impacting the entire State with the collapse of the housing market and tighter credit lending standards.
44 agree | 24 disagree
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Examiner Reader said:
Sadly, this is not a race factor, but one of education. Too many in the Black community simply do not have the fundamentals of financial management and a basic understanding of how mortgages work (especially ARMs). Wells Fargo will likely be able to show that low-income neighborhoods have a higher rate of foreclosure regardless of race. Since Baltimore City is majority black, it is only logical that there would be more foreclosures on low income blacks than on low income whites/asians/latinos, etc.
46 agree | 18 disagree
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G-Boy said:
Never assume logic. I think you answered your own question with the last two words of your post. Have you ever listened to the woman speak? Intelligence is a four letter word in Maryland political circles. They are just jumping on the bandwagon with the whole housing market thing. I am sure Doc Cheatum will be piping up soon to jump on board. Realish in it folks. Keep voting in the same old riff-raff
19 agree | 21 disagree
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Examiner Reader said:
Now Baltimore can bring the whole country and economy down with stupidity. Lets think how this plays out. Mortgage companies run to the hills and stop lending in Maryland or have standards so tight few can qualify for a loan. The excess number of houses on the market will quadruple and prices will now fall 60% instead of 20%. Way to go Dixon I am sure the people in Anne Arundel who pay their bills and want to sell will love you all the more. Think credit is tight now? Wait til Dixon destroys the state as a market. BRAC oh yeah try qualifying for a loan in a few months. Why can't people see how issues converge and act intelligently.
25 agree | 20 disagree
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