Sunday, September 20, 2009

Here's Who We Are Bailing Out

Illinois' Attorney General Lisa Madigan has filed a lawsuit against Wells Fargo, alleging that it

...illegally discriminated against African American and Latino homeowners by selling them high-cost subprime mortgage loans while white borrowers with similar incomes received lower cost loans...

...The lawsuit also follows a recent Chicago Reporter analysis of mortgage data submitted by Wells Fargo to the federal government. That study found that, in 2007, Wells Fargo sold high-cost, subprime loans more often to its highest-earning African-American borrowers in Chicago than to its lowest-earning white borrowers. According to the study, in 2007, about 34 percent of African Americans earning $120,000 or more received high cost mortgages from Wells Fargo in the Chicago metro area, while less than 22 percent of white borrowers earning less than $40,000 received high-cost mortgages from the lender.

“These disparities indicate that something is very wrong with Wells Fargo’s mortgage lending,” said Madigan. “They strongly suggest that the predictor of whether a borrower would receive a high-cost home loan from Wells Fargo was race, not income.”

This, of course, is the same Wells Fargo that received $25 Billion in federal bailout money via the TARP program.

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