Wells Fargo Accused Of Unfair Minority Mortgage Practices
When I wrote my article on Blacks And Hispanics getting higher mortgage rates, the bank I mentioned at the time was my favorite whipping boy, Citigroup. Seems that another bank is being called onto the carpet for doing the same thing.
Memphis and Baltimore have called out Wells Fargo for doling out high-interest subprime mortgages to black homeowners more than white homeowners. In both cities, this had led to overwhelming numbers of foreclosures, which hurts the tax base in both towns. Memphis backed it up with proof, showing that 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. Their study also found that black homeowners would have qualified easily for the same loans that white homeowners qualified for. It’s not quite redlining, but it might as well be.
What also doesn’t help Wells Fargo is that the New York Times did an expose on them last spring and found that black homeowners making more than $68,000 were nearly five times as likely to hold high-interest subprime mortgages as whites of similar or lower incomes in general, but with Wells Fargo that figure jumped to eight times.
Of course, Wells Fargo is trying to dodge the issue by saying they don’t comment on legal issues. That’s pretty much another way of saying “heck, we’ve been caught, but don’t admit it just deny it.” That doesn’t work for anyone else, so Wells Fargo should just come clean, pay a fine, renegotiate some of those loans, and move on. But they won’t, which means we’ll be hearing more about this lawsuit as it progresses.