If Baltimore sued Wells Fargo, why aren’t we?

By Alden Loury
Publisher

Black residents in Chicago and several other cities could pose that question to their municipal leaders, according to The Chicago Reporter’s analysis of mortgage lending data from 2007—the most recent year for which the data are available.

The City of Balitmore claims that Wells Fargo targeted African Americans with its subprime mortgage loans and that the practice resulted in widespread foreclosures there. Baltimore filed the lawsuit in January 2008 and amended the complaint earlier this month with affidavits from two former Wells Fargo employees alleging that the company encouraged and rewarded discriminatory actions. Next week, a federal judge will decide if the lawsuit should continue.

Baltimore officials cite numerous sources that document racial disparities in Wells Fargo’s lending. But black borrowers fared far better with Wells Fargo in Baltimore than they did in Chicago and several other cities, according to a Reporter analysis.

In the Baltimore metro area, African Americans received high-cost loans from Wells Fargo nearly 34 percent of the time in 2007. In the Chicago metro area, black borrowers got high-cost loans from Wells Fargo more than 49 percent of the time that year. And things were even worse in the metro areas for Jacksonville, St. Louis and Detroit, where Wells Fargo gave high-cost loans to African Americans 54 percent, 61 percent and 72 percent of the time, respectively. Download an Excel file showing The Chicago Reporter's analysis of Wells Fargo's high-cost lending to black borrowers in more than 350 metropolitan areas across the country.

Sparked, in part, by a Reporter investigation showing that Latinos and African Americans were two to three times more likely than their white and Asian counterparts to receive high-cost home loans, Illinois Attorney General Lisa Madigan issued subpoenas last year to Wells Fargo and Countrywide—the nation’s two largest home mortgage providers. Months later, again citing information from the Reporter, Madigan’s office filed a lawsuit against Countrywide claiming that the lender sold loan products to borrowers who couldn’t afford them. In October, after 10 other state attorneys general had joined the lawsuit, Countrywide settled the case for $8.7 billion, enough to modify the home loans of nearly 400,000 borrowers nationwide.

Tomorrow: a closer look at Wells Fargo’s lending to African Americans in both Baltimore and Chicago.

Comments

[Marilyn]

This is a good question, not only should Chicago have a lawsuit against Wells Fargo but any other city that was taken advantage of.

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