Tuesday, June 09, 2009

Bank Accused of Pushing Mortgage Deals on Blacks

Hat tip:Plantsmantx
From The NYTimes:

Bank Accused of Pushing Mortgage Deals on Blacks
Published: June 6, 2009

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.”

See, that is why some of these banks should be pushed out of business. Folks that could have qualified for prime loans, but pushed towards subprime mortgages.

And, as Plantsmantx commented:
It also puts the lie to the claim that "the only color that matters is green". If it was all about greed and nothing else, they could just as easily have pushed these loans on whites as enthusiastically as they pushed them on blacks, and made even more money. But, they didn't.

So true.

“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.”

Ms. Jacobson’s account and that of the other loan officer who gave an affidavit, Tony Paschal, both of whom have left Wells Fargo, provide the first detailed accusations of deliberate racial steering into subprimes by one of the nation’s top banks.

The toll taken by such policies, Baltimore officials argue, is terrible. Data released by the city as part of the suit last week show that more than half the properties subject to foreclosure on a Wells Fargo loan from 2005 to 2008 now stand vacant. And 71 percent of those are in predominantly black neighborhoods.


The N.A.A.C.P. has filed a class-action lawsuit charging systematic racial discrimination by more than a dozen banks, including Wells Fargo.

At the heart of such charges is reverse redlining, specifically marketing the most expensive and onerous loan products to black customers.

The New York Times, in a recent analysis of mortgage lending in New York City, found that black households making more than $68,000 a year were nearly five times as likely to hold high-interest subprime mortgages as whites of similar or even lower incomes. (The disparity was greater for Wells Fargo borrowers, as 2 percent of whites in that income group hold subprime loans and 16.1 percent of blacks.)

Rest of article at links above.

Haul their asses into court. Period.

1 comment:

false1 said...

Well that's foul, and not unsurprising. This is the very definition of the institutional racism that still runs rampant in this god forsaken country. What's more disheartening is that we've been hearing so much about the rise of the black middle class over the last decade. Considering that black middle class wealth is/was so tied up in our houses, I'm afraid to see what the fallout will be once the dust settles.

I'd like to suggest that while race is a big factor in this mess, I think that weakness is just as much to blame. We are preyed upon because we're weak. We don't have access to good information. We don't have access to independent financial institutions. We rely too much on our pastors to show us the way. Our community organizations are undermanned and underfunded.

Americans will always prey on the weak. Screwing over black folk allows them to sleep better at night. This stuff will continue until we start to act independently in our own self interests to create and maintain our own institutions.