Posted on April 24, 2007

Lenders Accused Of Preying On Blacks

Susan Vinella, Cleveland Plain Dealer, April 24, 2007

Three companies violated civil-rights laws by targeting predominantly black neighborhoods in Cleveland for home loans that were likely to result in foreclosure, according to complaints made by a housing advocacy group.

The Housing Advocates Inc. filed the complaints Monday with the city of Cleveland and the U.S. Department of Housing and Urban Development, accusing Argent Mortgage Co., Wells Fargo Bank and First National Mortgage Co. of unfair lending practices.

The agency filed on behalf of 77-year-old Elizabeth Redrick and other black residents whose homes are in foreclosure. Redrick lives on East 147th Street in ZIP code 44110, where the housing agency reported that the population is nearly 74 percent black.

Agency director Ed Kramer said Argent, based in California, made 30 percent more loans in Redrick’s ZIP code over three years than in ZIP code 44118, an area in and around Cleveland Heights where residents are 53 percent white.

“Data from across Cleveland clearly show that foreclosures and predatory lending are more concentrated in ZIP codes where the citizens and homeowners are majority African-American,” Kramer said.

Argent spokesman Chris Orlando said the company’s loans are sold through independent brokers and described the complaints as “completely without merit.”

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The complaints say First National served as the broker and Argent issued the mortgages. Wells Fargo then purchased the loans from Argent. The complaints say Wells Fargo knew or should have known that the loans were made under false assumptions.

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