Lawsuit has new proof that Wells Fargo used questionable practices - WMC Action News 5 - Memphis, Tennessee

Lawsuit has new proof that Wells Fargo used questionable practices

By Nick Kenney - bio | email

MEMPHIS, TN (WMC-TV) - The City of Memphis has more ammunition to use in its lawsuit against a company it said uses predatory lending practices.

In December, Memphis filed suit against Wells Fargo, claiming it unfairly targeted African Americans with questionable lending practices.

An amended lawsuit claimed to have more proof.

"They were clearly discriminatory and targeted toward minority borrowers," said Memphis Mayor AC Wharton.

The city included testimony from four different former employees of the Park Avenue Wells Fargo branch.  

One of those employees claimed, "the prevailing attitude was that African American customers weren't savvy enough to know they were getting a bad loan, so we would have a better chance of convincing them to apply for a high-cost, subprime loan."

The city claimed Wells Fargo knowingly duped customers into loans set up for failure, resulting in dozens of foreclosures, vacant homes and unstable neighborhoods.

In the complaint, the city compiled a list of 50 vacant homes that if blamed on predatory Wells Fargo loans.

Code enforcement showed up at the home at 2783 Harvard 30 different times in five years.  In 2008, the city paid a private contractor to knock down the house.

At 918 Decatur, Code Enforcement made 12 calls since 2006.

The city wants Wells Fargo to pay back for work done to many houses, including having a city crew mow the grass at one house.

"We have not specified a specific amount in the complaint," said John Relman, Memphis City Attorney.

Copyright 2010 WMC-TV. All rights reserved.

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