A recent news report states that the City of Philadelphia has sued Wells Fargo & Co., for violating the 1968 Fair Housing Act. The report states that the company used predatory lending tactics targeting minority mortgage borrowers. The company was sued on May 15 in the backdrop of another scandal involving its bankers setting up bogus accounts using the names of their customers.
Allegations Against Wells Fargo
According to the City of Philadelphia, Wells Fargo Bank encouraged Hispanic and black borrowers to take riskier loans that attracted higher interest rates though they were qualified for lower risk and lower interest mortgages. Philadelphia also claims that the bank forced most of the borrowers into foreclosure. By comparing data spanning for 10 years, Philadelphia concluded that the company was more likely to give blacks and Hispanics higher interest loans than white borrowers.The law suit further claims that homes situated in minority neighborhoods were more likely to face foreclosure when compared to homes situated in white neighborhoods. The city is suing Wells Fargo for the discriminatory lending practices it conducted between 2004 and 2014. The city is demanding for monetary damages and an injunction to compel the bank to stop engaging in unfair lending practices.The offense that the city is suing Wells Fargo for is called redlining. This is an ancient practice where banks drew redlines around selected neighborhoods and refused to extend loans to those living in these areas. This practice is unconstitutional because it is based on a borrower’s race or ethnicity.
About Karl Heideck
Karl Heideck is an attorney who features in Hire Counsel’s list since April 2015. Heideck has over ten years worth of experience as a lawyer practicing in Philadelphia. He started out as an attorney working for Pepper Hamilton LLP. It was at this time that Karl Heideck gained significant expertise in handling complaints.Karl Heideck graduated from Swarthmore College in 2003 with a Bachelor of Arts degree. He later went on to study law and graduated in 2009 from Temple University’s “James E. Beasley” School of Law. Currently, Karl Heideck offers services ranging from risk management advertisement, compliance consulting, and representation in product liability, corporate law, and commercial litigation. Read More.