Home >> Daily Dose >> City Sues Wells Fargo Over FHA Violations
Print This Post Print This Post

City Sues Wells Fargo Over FHA Violations

On Monday, the City of Philadelphia sued Wells Fargo & Co for predatory lending and violations of the Fair Housing Act. This suit comes just two weeks after the U.S. Supreme Court ruled that cities may sue lenders for alleged discrimination, according to Reuters.

Two weeks before this case, the Supreme Court had ruled that Miami could sue Bank of America for predatory lending practices that allegedly increased segregation.

The complaint alleges that Well Fargo had pushed minorities into riskier loans at higher rates, and chargers that this had been an ongoing problem since 2004.

"The City of Philadelphia's investigation revealed that both the resources of the city and the lives of Philadelphia's citizens have been negatively affected by Wells Fargo's discriminatory lending practices," city Solicitor Sozi Pedro Tulante said in a statement on CNBC. "The Law Department must take action in light of this evidence and halt these discriminatory practices on behalf of the citizens of Philadelphia."

The City said that black borrowers were over twice as likely to receive high-cost or high-risk loans than white borrowers, while Hispanic borrowers were around twice as likely, and home in predominantly minority neighborhoods were 4.7 times more likely to be foreclosed.

"The city's unsubstantiated accusations against Wells Fargo do not reflect how we operate," Wells Fargo spokesman Tom Goyda said in a statement. "Wells Fargo has been a part of the Philadelphia community for more than 140 years and we will vigorously defend our record as a fair and responsible lender."

The bank continued its defense of itself in its statement.

"Wells Fargo has been a part of the Philadelphia community for more than 140 years and we will vigorously defend our record as a fair and responsible lender," the statement added. "We will continue to focus on helping customers in Philadelphia and its surrounding communities succeed financially, and on expanding homeownership in Pennsylvania and across the United States."

About Author: Seth Welborn

x

Check Also

Former FHA Commissioner Wade Joins Walker & Dunlop

Dana Wade joins the real estate finance firm to lead the company’s affordable housing financing initiatives.

Subscribe to MDaily

MReport is here for you to stay on top of important developments in the mortgage marketplace. To begin receiving each day’s top news, market information, and breaking news updates, absolutely free of cost, simply enter your email address below.