State Attorney General accuses Wells Fargo of pushing subprime loans on minority lenders
The Illinois Attorney General filed suit against Wells Fargo last week for discriminatory and illegal mortgage lending practices against blacks and Latinos.
CNN.com has the story.
Lisa Madigan, the Attorney General of Illinois, believes that Wells Fargo has turned Latino and African-American communities into hotbeds of subprime lending. She stated that the high foreclosure rates in these communities are a direct consequence of the illegal practices committed by Wells Fargo. Madigan also alleged that white borrowers with equivalent incomes were typically given lower-cost loans.
The lawsuit goes on to complain that Wells Fargo Financial Illinois, a subsidiary, misled borrowers about the terms of their mortgages and misrepresented the pros and cons of refinancing. The suit also claims that Wells Fargo routinely “flipped” loans and confused borrowers with misleading mailings.
Madigan has asked the court to rescind all of the contracts at issue and for Wells Fargo to pay restitution to those who have been afflicted.
Wells Fargo maintains that it practices responsible lending and does not use race as a factor.
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