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Wells Fargo accused of REVERSE REDLINING

By Leigh   Follow   Mon, 17 May 2010, 8:03pm   977 views   10 comments
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Come on all you CRA critics, you read that right: REVERSE REDLINING!

Former Employees Allege Reverse Redlining at Wells Fargo

by AUSTIN KILGORE

Wells Fargo (WFC: 31.97 -0.22%) allegedly engaged in reverse redlining, the act of offering economically disadvantaged borrowers riskier mortgages, in neighborhoods across Memphis and surrounding Shelby County, according to the claims of former employees in a lawsuit (download here), filed by the relevant municipal governments.

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In addition, the former employees claim Wells Fargo drafted subprime marketing materials on the basis of race by using software to “translate” the materials into what the bank defined as the “language” of African American, and referred to subprime loans located in minority communities as “ghetto loans.”

http://www.housingwire.com/2010/01/04/former-employees-allege-reverse-redlining-at-wells-fargo/

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1. Vicente Follow Befriend (8) 203 threads 4,403 comments Davis, CA

   1   8:25pm Mon 17 May 2010   Share   Quote   Permalink   Like   Dislike   It's just another way to say they were engaged in predatory loan practices. Because they all thought the loans wouldn't be on their books when it all blew up, and they'd anyhow all be rolling in so much money by the time it did they wouldn't care.

2. elliemae Follow Befriend (25) 413 threads 6,976 comments Saint George, UT elliemae's website

   2   8:39pm Mon 17 May 2010   Share   Quote   Permalink   Like   Dislike   leigh says In addition, the former employees claim Wells Fargo drafted subprime marketing materials on the basis of race by using software to “translate” the materials into what the bank defined as the “language” of African American, and referred to subprime loans located in minority communities as “ghetto loans.” Let's hope that the "language" of African American's includes the word, "lawsuit."

3. vain Follow Befriend (2) 68 threads 876 comments

   3   4:44pm Tue 18 May 2010   Share   Quote   Permalink   Like   Dislike   "If you b*tc*es don't have our money, you ain't go no more home to live at." or "If you b*tc*es don't have our money, we gonna put a cap in yo ass (foreclosure)."

4. thomas.wong1986 Follow Befriend 16 threads 4,426 comments

   4   5:31pm Tue 18 May 2010   Share   Quote   Permalink   Like   Dislike   We live in interesting times... even an illegal alien who walked over the border, gets caught by a US citizen and handed over to the border patrol can claim their human rights were violated by the US citizen and seeks $1M in damages. The suit seeks damages under the Fair Housing Act, which prohibits discriminatory lending practices. Lawyers for the city and county claim 43.2% of Wells Fargo’s foreclosures are in the region’s minority neighborhoods, even though these neighborhoods account for 15.1% of Wells Fargo’s origination portfolio in the market. Foreclosures in the area’s white neighborhoods — where Wells Fargo originated 59.5% of its loans in the market — accounted for 21.5% of the bank’s total foreclosures in the market. The lawyers contend if Wells Fargo were “properly and uniformly applying responsible underwriting practices” in both communities, foreclosure rates would be comparable. But research from both the Federal Reserve Bank of New York and the Columbia School of Business, released in April of last year, argues that claims of reverse redlining are a by-product of insufficient data. See earlier commentary. “The reverse redlining suit seeks to hold Wells Fargo responsible for the damage that its illegal and discriminatory practices have caused the city and county,” Memphis mayor AC Wharton said in prepared remarks during a press conference held at the city’s National Civil Rights Museum. “Our holding this press conference announcement at the National Civil Rights Museum underscores our assertion that the predatory lending issue is one of basic fairness,” he added.

5. simchaland Follow Befriend (6) 10 threads 1,234 comments Oakland, CA

   5   7:47pm Tue 18 May 2010   Share   Quote   Permalink   Like   Dislike   Wells Fargo be hella bootsy. They employees be smirkish. Peace out.

6. elliemae Follow Befriend (25) 413 threads 6,976 comments Saint George, UT elliemae's website

   6   8:28pm Tue 18 May 2010   Share   Quote   Permalink   Like   Dislike   Wow. You'd make a lovely black bear, simcha.

7. MarkInSF Follow Befriend 14 threads 1,118 comments

   7   10:46pm Tue 18 May 2010   Share   Quote   Permalink   Like   Dislike   In addition, the former employees claim Wells Fargo drafted subprime marketing materials on the basis of race by using software to “translate” the materials into what the bank defined as the “language” of African American, and referred to subprime loans located in minority communities as “ghetto loans.” Oh, come on. What's wrong with that? Some groups of people use language differently. Is it wrong to tailor your marketing materials to them? And, what, ghettos don't exist? Is somehow making the word "ghetto" bad to say make them go away? If it was predatory lending, fine, I'm against that, but that second piece you quoted is completely irrelevant IMHO.

8. Nomograph Follow Befriend (1) 104 threads 2,851 comments

   8   12:00am Wed 19 May 2010   Share   Quote   Permalink   Like   Dislike   MarkInSF says And, what, ghettos don’t exist? The original ghetto (OG) is on the island of Cannaregio in Venice. It's an ironworks area where the Jews still live. It's quite nice. http://en.wikipedia.org/wiki/Venetian_Ghetto

9. MarkInSF Follow Befriend 14 threads 1,118 comments

   9   1:40am Wed 19 May 2010   Share   Quote   Permalink   Like   Dislike   Nomograph says MarkInSF says And, what, ghettos don’t exist? http://en.wikipedia.org/wiki/Venetian_Ghetto Etymology is fascinating, but I think the Urban Dictionary is probably more in line with how Americans use the word. http://www.urbandictionary.com/define.php?term=ghetto 1. (n.) an impoverished, neglected, or otherwise disadvantaged residential area of a city, usually troubled by a disproportionately large amount of crime 2. (adj.) urban; of or relating to (inner) city life 3. (adj.) poor; of or relating to the poor life 4. (adj.) jury-rigged, improvised, or home-made (usually with extremely cheap or sub-standard components), yet still deserving of an odd sense of respect from ghetto dwellers and non-ghetto dwellers alike But yeah, I don't think I'd mind living in the original Venice ghetto. Property values tripled there from the mid 90's to 2008. Not holding up so well of late though. Must have been the CRA and Fannie Mae and the Democrats at work.

10. turtledove Follow Befriend 5 threads 93 comments Premium

    10   4:37am Wed 19 May 2010   Share   Quote   Permalink   Like   Dislike   Protected   What a huge surprise.... Banks taking advantage of people who were more than willing to be taken advantage of.