Wells Fargo Pushed Risky Loans on Hispanics and Other Minority Borrowers

The Chicago area’s Cook County has filed a lawsuit against Wells Fargo & Co., accusing the nation’s biggest mortgage lender of subjecting Hispanic and African American borrowers to discriminatory and predatory lending practices.

Hundreds of millions of dollars in damages are allegedly involved.

According to the suit, Wells Fargo purposely issued out these high-risk loans to minority borrowers because most of them did not qualify for traditional loans.

The lawsuit, which was filed Thursday in Chicago, contends that Wells Fargo engaged in the practice known as “equity stripping,” which involves imposing inflated or unneeded rates and fees, plus penalties to refinance. That practice, alleged to have taken place for much of the past decade, may involve up to 26,000 loans and compensatory damages that could top $300 million, according to the lawsuit.

“Equity stripping is an abusive form of ‘asset-based lending’ that maximizes lender profits based on the value of the underlying asset and onerous loan terms, while in disregard for a borrower’s ability to repay,” the lawsuit alleges.

Read more from this story HERE.