Memphis, Shelby County Get Green Light In 'Reverse Redlining' Fair Housing Litigation Against Alleged "Ghetto Loans" Peddler

In Shelby County, Tennessee, the Memphis Daily News reports:

• One week after a federal judge in Baltimore denied an effort by Wells Fargo to dismiss that city’s mortgage discrimination lawsuit against the lender,(1) a federal judge in Memphis has done the same thing.
• U.S. District Judge S. Thomas Anderson has denied a motion by Wells to dismiss a lawsuit Memphis and Shelby County jointly filed against Wells in late 2009. That means both governments can now move forward with their suit that alleges Wells improperly pushed black borrowers into high-cost loans. The suit also claims black homeowners were targeted for burdensome refinance and home equity loans.
• “The court holds that plaintiffs have alleged sufficient facts to establish standing to pursue claims for violations of the Fair Housing Act and the Tennessee Consumer Protection Act,” Anderson wrote in his ruling.
• “Additionally, plaintiffs have adequately pled their claim that Wells Fargo’s lending practices had a disparate impact on African-Americans in Memphis and Shelby County in violation of the FHA.” The local lawsuit against Wells has been pending for almost a year and a half.

For more, see Federal Judge Denies Local Wells Fargo Suit Dismissal.

(1) See Baltimore Finally Gets Green Light To Continue Against Alleged "Ghetto Loans" Peddler In Reverse Redlining Suit; Ruling May Help Similar Memphis Case.

Baltimore's earlier complaints included testimony from two former high-ranking Wells Fargo employees stating that Wells Fargo intentionally made bad loans to African-Americans. The employees, who worked out of Virginia and Maryland but knowledgeable about the company's national lending practices, according to the complaints, said Wells Fargo marketed subprime loans to predominantly African-American ZIP codes and churches, used software to "translate" marketing materials into African-American vernacular, and that company officials referred to the loans in minority communities as "ghetto loans" and to the borrowers as "mud people." See The Daily Record: Ex-workers allege race-based loan approach at Wells Fargo.

Go here to read more about the Baltimore case, and here to read more about the Memphis case, and here for earlier posts on the "ghetto loans" allegations made against Wells Fargo.