Philadelphia has filed a federal lawsuit accusing Wells Fargo & Co. of overcharging more than 1,000 black and Latino homebuyers for loans to buy homes in the city since 2004.
Citing six confidential informants who formerly worked for the bank, the city says Wells Fargo knew or should have known that those borrowers could not handle these loans at those terms.
The suit, filed in U.S. District Court, says unnecessarily expensive loans drove minority borrowers toward foreclosures that cost the city unpaid taxes, drove down property values, and violated the federal Fair Housing Act.
Wells Fargo, the city’s largest bank, has hurt neighborhoods with a “longstanding, unbroken policy and practice of intentionally steering minority borrowers in Philadelphia into ‘discriminatory’ mortgage loans” at higher cost than it charges “similarly situated white buyers,” the suit charges. (Philadelphia Inquirer)