Baltimore Settles Wells Fargo Lawsuit
The bank was accused of steering minority borrowers to subprime mortgages.
A settlement was announced Thursday in a lawsuit against Wells Fargo that claimed the bank targeted minorities with subprime lending.
Baltimore City filed the lawsuit in 2008 alleging the bank had steered minority customers to subprime mortgages.
In exchange for dropping the lawsuit, Wells Fargo will provide $425 million in lending for purchasing homes in the city in the next five years, give $4.5 million for a lending assistance program for residents who want to buy or renovate a home in the city and pay $3 million for local priority funding and foreclosure related initiatives, according to a news release announcing the settlement.
The settlement also includes $125 million in compensation for black and Hispanic homeowners the suit claims were steered toward subprime mortgages by the bank, even though they were qualified for prime mortgages, and as a result paid higher fees and rates than white borrowers.
In a news release posted on its website, Wells Fargo denied any wrong doing, claiming the mortgages in question had been sold by independent mortgage brokers through its Wholesale channel.
"Wells Fargo is settling this matter solely for the purpose of avoiding contested litigation with the DOJ, and to instead devote its resources to continuing to provide fair credit services and choices to eligible consumers, and important and meaningful assistance to borrowers in distressed U.S. real estate markets," according to the release.
Sean Tully
11:59 pm on Monday, July 16, 2012
The banks were thieves, no doubt. But they didn't commit their crime against our nation by themselves. It took willing buyers to lie and fudge the documents they signed. There is no way those people should be receiving any benefit from this lawsuit.
But, the lending to people who are willing to buy and fix up homes is good if those people must live in the homes for a fixed number of years. If investors can get a hold of that money, we'll just sink deeper into the pit. They will find a way to cheat the system and they will surely become slum lords. It's will be the same old story.
Tamaira
9:06 pm on Wednesday, April 24, 2013
It's about time the people get some sort of compensation for the wrong doing of the banks. How can you sleep at night knowing you have people higher interest rates than what they were entitled to. Hopefully this suit will be better than the independent forenosure review