Consumer Law

Wells Fargo Under Fire For Lending Practices

By Randall Ryder

The good news is that Wells Fargo just settled a lawsuit with the NAACP based on alleged violations of the Fair Housing Act (FHA). The bad news is that two cities have now filed suit against Wells Fargo under the FHA. This comes on the heels of a class action lawsuit filed last summer for allegedly improperly lowering lines of home equity credit.

The two new suits were filed in Baltimore and Memphis, and both allege Wells Fargo discriminatorily steered African-American into expensive mortgages they could not afford. This causes a rise in defaults and then foreclosures, which then reduces tax revenue and increases the costs of municipal services.

In response, Wells Fargo stated they stand by their lending practices, and ” . . . believe we can accomplish more for homeowners through working with communities than having to respond to litigation. It is our hope that Baltimore and Memphis make that same choice soon.”

Wells Fargo Settles With NAACP, But 2 Cities File New Fair Lending Suits | ABA Journal

(photo: wallyg)

Full post as published by Caveat Emptor on April 21, 2010 (boomark / email).