In The News - The Boycott Edition

Wells Fargo: Accused of Practicing Shady Subprime Deals

A whistleblower for Wells Fargo Banks admitted that she and her fellow loan officers purposely singled out Blacks in Baltimore and Maryland and gave them high-interest subprime loans, which resulted in hundreds of African-Americans ending up in foreclosure. Now, a federal lawsuit as well as a class-action lawsuit by the NAACP have been brought against Wells Fargo for its racially bias banking, according to the NewYorkTimes.com. African-American homeowners, who could have qualified for a prime home loan, were forced into taking subprime loans, and worse yet, used Black churches to find their victims.

In a recent survey, the New York Times found that Black households making $68,000 a year were five times more likely to have acquired their home with a high-interest rate subprime mortgage. Both sides expect to appear in court at a hearing in the case in late June.--WLW

NYTimes Article

"Bank Accused of Pushing Mortgage Deals on Blacks
By MICHAEL POWELL

As she describes it, Beth Jacobson and her fellow loan officers at Wells Fargo Bank "rode the stagecoach from hell" for a decade, systematically singling out blacks in Baltimore and suburban Maryland for high-interest subprime mortgages.

These loans, Baltimore officials have claimed in a federal lawsuit against Wells Fargo, tipped hundreds of homeowners into foreclosure and cost the city tens of millions of dollars in taxes and city services.

Wells Fargo, Ms. Jacobson said in an interview, saw the black community as fertile ground for subprime mortgages, as working-class blacks were hungry to be a part of the nation's home-owning mania. Loan officers, she said, pushed customers who could have qualified for prime loans into subprime mortgages. Another loan officer stated in an affidavit filed last week that employees had referred to blacks as "mud people" and to subprime lending as "ghetto loans."

"We just went right after them," said Ms. Jacobson, who is white and said she was once the bank's top-producing subprime loan officer nationally. "Wells Fargo mortgage had an emerging-markets unit that specifically targeted black churches, because it figured church leaders had a lot of influence and could convince congregants to take out subprime loans."

For more visit- Nytimes.com

Source: Essence