Wells Fargo Charged For Targeting Blacks In Foreclosure Fiasco
Wednesday, June 11th, 2008The city of Baltimore has legally filed a complaint that Wells Fargo has targeted blacks as regards foreclosure related issues. The suit was filed on Tuesday 20th May 2008, claiming that Wells Fargo (based in California) resorted to predatory lending luring the Blacks of Baltimore. The desire was to make “quick profit because it believes it can successfully exploit those communities.”
In January Baltimore had legally framed charged Wells Fargo and hit the headlines for doing so. A higher rate of interest was taken from the Blacks. In March Wells Fargo hit back saying that the foreclosure problems of Baltimore are largely self-inflicted. It stemmed from the city itself foreclosing on houses that were lagging behind in tax payments.
Baltimore city claims that Wells Fargo charged higher interest, contracted mortgages without checking on the borrowers ability to continue after expiry of the ‘teaser rate’ period, stripped the equity by unnecessary refinancing, paid extra to the brokers for inflating the interest rates, enforced prepayment penalties to stop the borrowers from getting refinancing help and charging excessive fees without giving the borrower any extra benefits.
Baltimore City also took umbrage at the charge leveled against it by Wells Fargo that the city was responsible fore escalating numbers of foreclosure because of tax related problems.
Wells Fargo accused that there were 19,000 tax lien foreclosure cases in court since 2000. But the city says that only 2,300 ended in foreclosure. Many of these came from Project 5000 of the city that does not evict any resident but returns the vacant units to the tax rolls. Wells Fargo claims that it is being used as a scapegoat to account for the wrongs perpetuated by Baltimore City itself. Only 1% of the foreclosures in the city can be attributed to Wells Fargo, alleges Kevin Waetke of the company.
Baltimore claims that the loans taken out in the black community was four times higher than those sanctioned to the Whites. Black localities had been at the receiving end – these include Belair-Edison, Sandtown-Winchester, Greater Govans and Waverly.
While the court battle rages the people continue to suffer and lose their homes with children, elders and pets. The foreclosure virus knows no barriers. Latest reports show that it has started spreading to rural USA and is also affecting gated communities in ritzy glamorous localities. Foreclosure is a great leveler.
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