Via Minnesota Independent: According to Cappello, Wells Fargo introduced a program in 2002 called “Loan Economics,” which gave loan officers the authority to offer discounts to loan applicants. The savings on lower fees and interest rates could be significant, ranging from $500 to as much as $10,000 per loan. The suit claims that the Los Angeles area Wells Fargo manager refused to allow loan officers operating in certain minority neighborhoods to offer the program. Borrowers in predominantly white neighborhoods were given access to the software.
Cappello said the suit stemmed from complaints by black and Hispanic loan officers for Wells Fargo, who said they asked to use the software in their branches but upper management refused.
10 Reader Comments
3:53 pm
Funny. They wanted to give Mrs. Lungs and I more than we wanted…Oh.
I wonder if we would have gotten the same deal if borrowing while black…
4:02 pm
Of course. Nothing about the Asians. Sheesh.
5:58 pm
Cat, your Samoan people decided to switch sides of the road to drive on. At least UnAmerican Samoa did.
6:18 pm
We have a mortgage through Wells Fargo and my wife works at Wells Fargo. One of the things I noticed was the loan guy discouraged us from taking an ARM or any other dodgy mortgage scheme. We didn’t plan to anyway, but that was one of his first points.
I’ve heard of these suits, but all I know is what I read in, say Minnesota Independent and secondhand information.
Wells did offer some of the more exotic loans, but not to the same extent as, let’s say, a Countrywide. Maybe that’s why they got through this whole mess in better shape.
@Bob, if you have a good debt-to-income ratio, Wells really likes that and will look favorably on your application. That’s my experience.
6:50 pm
My mom’s house was refinanced through WF and she does not appear to have gotten some screwed up loan. I think I recall having this conversation with her. Still, this is not to say that whatever is being claimed in this CA isn’t really going on, I’m just glad she didn’t get swept up in it. Actually, I think the original mortage actually ended up becoming property of WF after mergers and what not. Maybe that changed things… Could it have?
7:22 am
We actually had zero debt at the time. While we didn’t have a lot of income, we both had (we felt at the time) steady jobs.
A few months after we got the house, I lost my job…Thankfully, we had prepared for the possibility that one of us could be unemployed and selected a home well within our means, with a 30 year fixed rate.
We still have our home. In fact, it’s paid for, and we are debt-free again. Which is good, because now it’s Mrs. Lungs who is unemployed.
8:48 am
I work with home mortgages for US bank, it prbly wasnt racist, but that they didn’t have good stats. Usually a loan officer will do anything to please the client, as thats how they get more customers.
9:12 am
Just because it didn’t happen to you doesn’t mean it doesn’t happen, people.
Plus, Minnesota has a pretty small minority population so this area probably wouldn’t have been targeted anyway (if the allegations of this corporate philosophy are true, which I fully believe they are).
9:33 am
this is such old news.
1:20 pm
@Bixby: It was not at all uncommon, even years prior to the banking meltdown, for an original mortgage to be sold off to another bank. You went from paying one bank to paying another.