Bank Accused of Pushing Mortgage Deals on Blacks

Discussion in 'Race Relations/Racism' started by Bass v 2.0, Jun 9, 2009.

  1. Bass v 2.0
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    Bass v 2.0 Biblical Warrior For God.

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    Wells Fargo Pushed "Ghetto Loans" To Black People In Baltimore | NewsOne


    Key quote:

    “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.





    " 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.)

    “We’ve known that African-Americans and Latinos are getting subprime loans while whites of the same credit profile are getting the lower-cost loans,” said Eric Halperin, director of the Washington office of the Center for Responsible Lending. “The question has been why, and the gory details of this complaint may provide an answer.” "




    “They referred to subprime loans made in minority communities as ghetto loans and minority customers as ‘those people have bad credit’, ‘those people don’t pay their bills’ and ‘mud people,’ ” Mr. Paschal said in his affidavit.

    He said a bank office in Silver Spring, Md., had an “affinity group marketing” section, which hired blacks to call on African-American churches.


    “The company put ‘bounties’ on minority borrowers,” Mr. Paschal said. “By this I mean that loan officers received cash incentives to aggressively market subprime loans in minority communities.”




    Loan officers employed other methods to steer clients into subprime loans, according to the affidavits. Some officers told the underwriting department that their clients, even those with good credit scores, had not wanted to provide income documentation.

    “By doing this, the loan flipped from prime to subprime,” Ms. Jacobson said. “But there was no need for that; many of these clients had W2 forms.”

    Other times, she said, loan officers cut and pasted credit reports from one applicant onto the application of another customer
    .

    These practices took a great toll on customers. For a homeowner taking out a $165,000 mortgage, a difference of three percentage points in the loan rate — a typical spread between conventional and subprime loans — adds more than $100,000 in interest payments.
     
    Last edited: Jun 9, 2009
  2. B94
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    B94 Member

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    So Wells Fargo tried to give black people subprimes and not the white people. My question is why would the black people go for these loans and not shop around?
     
  3. justabubba
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    justabubba Member

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    while i wasn't there, can only speculate that the home buyers (wrongly) assumed the mortgage originators were going to offer them the best deal available

    which causes me to note your question might have instead asked why were blacks - who qualified for conventional mortgages - instead offered subprimes. and why did wells fargo target black communities to offer those more expensive loans
     
  4. B94
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    B94 Member

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    Looks like Wells Fargos motives were racist but based on profits, that seems to have worked.
     
    Last edited: Jun 10, 2009
  5. AkronGuy
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    AkronGuy Member

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    Then don't take the loans. Why is it when black people make a mistake, it's always someone else's fault but their own ?
     
  6. Dis
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    Seriously? The word "no" is foreign to black people? Someone twisted their arm and made them say yes?

    GMAFB.
     
  7. AkronGuy
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    AkronGuy Member

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    Exactly ! What do you expect though ? Most black Americans have no concept of personal responsibility. "No" and "It's my own fault I'm in this situation" is an alien concept to many black Americans.
     
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  8. JBeukema
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    JBeukema BANNED

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    first blacks bitch that they get turned down for loans 'cuz they;re not credit-worthy

    now they bitch about getting mortgages

    it's always the White Man's fault,, eh ass shafter?
     
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  9. AkronGuy
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    AkronGuy Member

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    Exactly, like a group of spoiled children.
     
  10. KittenKoder
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    KittenKoder Senior Member

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    Blacks whined about not getting mortgages so much the government forced banks to do it ... now they are suing the banks? This is sick, I say true equality, drop everything that is based on race from now on, they can struggle like the rest of us.
     

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