Hundreds of foreclosed homes in black neighborhoods resulting in millions of dollars of tax losses are the result of predatory lending, argues a federal lawsuit to be filed today by Baltimore City against one of the country’s largest mortgage lenders.
The lawsuit accuses Wells Fargo Bank of targeting black homeowners in Baltimore with high-interest loans and deceptive lending practices, costing the city millions in tax dollars and resulting in one of the highest foreclosure rates of any lender in the city.
“We can make the case that African-American homeowners were targeted by Wells Fargo with inferior mortgage products, and we have evidence that some of this practice may be illegal,” Sterling Clifford, spokesman for Mayor Sheila Dixon, said Monday.
Citing “reverse redlining,” the suit alleges the bank targets black neighborhoods. The practice resulted in a foreclosure rate for the bank four times higher in the city’s predominantly black neighborhoods compared to white neighborhoods, the suit alleges.
According to Mortgage Daily, a trade publication, Wells Fargo originated $79 billion in residential mortgages in the fourth quarter of 2007, making it the county’s second-largest mortgage lender.
Since 2000, Wells Fargo has foreclosed on 313 homes in Baltimore, the suit says.