Bank accused of improperly steering African-Americans into subprime loans
The New York Times has an article detailing the alleged practices used by Wells Fargo to steer African-Americans into sub-prime mortgages. The article relies on the affidavit testimony of two former Wells Fargo loan officers from an ongoing discrimination lawsuit between the City of Baltimore and Wells Fargo. According to the affidavits quoted in the article, Wells Fargo employees commonly referred to sub-prime loans as “ghetto loans” and blacks were referred to as “mud people” and other derogatory racial slurs. The employees’ testimony also details the unfair and deceptive tactics used by Wells Fargo to place African-American loan applicants into sub-prime loans, even when the prospective borrower could have qualified for a prime loan. There is further testimony about how Wells Fargo targeted African-American church leaders to help steer their congregations to Wells Fargo mortgages and how Wells Fargo recruited African-American loan officers specifically to work with potential African-American borrowers. If you’re interested in reading the full text of the affidavits, the Consumerist has a link to them here.
Many observers have long suspected that minorities were unfairly targeted by sub-prime lenders. The affidavit testimony of these two former Wells Fargo employees strongly corroborates this suspicion. The alleged practices of Wells Fargo are appalling, and if proven to be true, Wells Fargo deserves the maximum penalty available.
(photo: Steve Rhodes)