Unfortunately, in the economic downturn predatory lending is coom place. Discrimination is part such practice. This case addresses such practice head on.
The Justice Department announced on Thursday that it has settled charges of mortgage discrimination with Wells Fargo, the nation’s largest home mortgage lender. Under the terms of the settlement, Wells Fargo will pay $175 million to 34,000 individuals who were discriminated against in the mortgage application process. The news garnered considerable print media coverage, but only a brief mention on one network newscast.
ABC World News (7/12, story 6, 0:50, Sawyer) reported, “The bank is settling a charge that they discriminated against minorities seeking loans. Specifically, that qualified African-American and Hispanic borrowers were given higher mortgage rates and steered towards riskier subprime mortgages solely because of the color of their skin. On average, those with the subprime mortgages will receive $15,000 from this settlement. Those charged the higher rates will receive $2,000. Wells Fargo continues to deny any wrong doing.”
The New York Times (7/12, Savage, Subscription Publication) reports, “Wells Fargo, the nation’s largest home mortgage lender, has agreed to pay at least $175 million to settle accusations that its independent brokers discriminated against black and Hispanic borrowers during the housing boom, the Justice Department announced on Thursday. If approved by a federal judge, it would be the second largest residential fair-lending settlement in the department’s history.” The Times adds, “An investigation by the department’s civil rights division found that mortgage brokers working with Wells Fargo had charged higher fees and rates to more than 30,000 minority borrowers across the country than they had to white borrowers who posed the same credit risk, according to a complaint filed on Thursday along with the proposed settlement.”