Federal Judge Rejects Wells Fargo’s Motion To Dismiss Predatory Lending Suit

uit filed against Wells Fargo by the city of Baltimore accusing the company of racially based predatory lending will be allowed to continue, according to a federal judge's [link=http://www.mdd.uscourts.gov/Opinions/Opinions/WellsFargoMemo.pdf][u]ruling[/u][/link]. U.S. District Court Judge Benson Everett Legg has denied Wells Fargo's motion to dismiss the suit, which the city filed in January. City officials allege that Wells Fargo loan originators targeted black homeowners and steered them into subprime mortgages. In March, Wells Fargo and HSBC [link=http://www.mortgageorb.com/e107_plugins/content/content.php?content.3146][u]were accused[/u][/link] by the National Association of the Advancement of Colored People (NAACP) of discriminatory lending. According to the NAACP, black home buyers have been more than three times more likely to receive subprime loans than white borrowers with comparable credit scores and income levels. The bank tried to dismiss the motion, challenging the city's standing and arguing that its claimed damages were "so speculative that the case should be dismissed at the outset without merits discovery," according to Legg's memorandum to counsel. "The city's alternative theory of liability, disparate impact, has not yet been tested factually," the memo continues. "Nevertheless, because the case will proceed on liability in general, the city is entitled to discovery on both of its theories of liability, including disparate impact." SOURCE: U.S. District Court of M

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