Baltimore City officials accused Wells Fargo Bank of deflecting the blame for hundreds of home foreclosures and demanded reimbursement for millions of dollars in lost tax revenue, according to new court filings.
The accusations come in an 82-page response to Wells Fargo?s motion to dismiss the city?s federal lawsuit claiming the mortgage lender targeted minority homeowners for high-price loans and illegal lending practices. City attorneys responded late Monday night to the bank?s claims that the city was responsiblefor 19,000 tax lien foreclosures since 2000.
“Defendants would have the court believe that Baltimore has intentionally ?unleashed? on its residents a program of tax lien sales that causes thousands of foreclosures for nothing more than a small unpaid water bill and the like,” city attorneys wrote.
A recent report on foreclosures in Maryland showed Baltimore had 3,349 mortgages enter arrears in 2007 ? a 793 percent increase from 2006. Wells Fargo foreclosed on 313 city homes since 2000, the suit said.
City officials filed the lawsuit in January, accusing the bank of charging minority homeowners higher interest rates and prepayment penalties and encouraging unnecessary refinancing. In March, the bank filed a motion to dismiss, accusing the city of overzealously foreclosing on homes for unpaid water and tax bills.
Wells Fargo spokesman Kevin Waetkes accused the city of trying “to use a single financial services company as a scapegoat for broad social problems that have plagued Baltimore for decades.”
“The city itself has already conceded that 99 percent of Baltimore foreclosures have nothing to do with Wells Fargo,” he said in a statement released Wednesday.
Sterling Clifford, a spokesman for Mayor Sheila Dixon, said officials expect a “substantial number” of tax revenue losses from foreclosures and called Wells Fargo?s reverse accusations a “smoke screen argument.”
Waetkes, in his statement, countered, “This lawsuit has no merit” and vowed to “vigorously defend it.”
