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 Baltimorechapter. ACORN?s national affiliate settled a predatory lending lawsuit against Wells Fargo in 2006.
