In a federal lawsuit, Philadelphia accuses Wells Fargo & Co. of issuing predatory loans to more than 1,000 Black and Latino homebuyers in the city since 2004, The Philadelphia Inquirer reports.
The city’s lawsuit, which relies on six former Wells Fargo employees, alleges that the bank overcharged minority borrowers for loans the bank knew or should have known would end in foreclosures, unpaid taxes to the city, and diminished property values. Wells Fargo’s actions violate the federal Fair Housing Act, the suit alleges.
Wells Fargo disputes the claims, calling them “unsubstantiated accusations,” The Inquirer reported.
“These types of cases have been pending in other states and have been rejected by all courts who have addressed the merits of the claims,” bank spokesman James Baum stated, according to the newspaper.
He added that Wells Fargo is “a fair and responsible lender.”
In 2012, Wells Fargo settled a fair lending lawsuit with the U.S. Justice Department. The bank agreed to pay $175 million to resolve allegations that it charged Blacks and Hispanics high rates and fees on mortgages from 2004 through 2009, even though the borrowers qualified for better loans.
It was, at that time, the second largest fair lending settlement in the department’s history.
SOURCE: Philadelphia Inquirer