Wednesday
Apr252007
Wells Fargo and others Ripped off Blacks in Predatory Lending Scheme
Wednesday, April 25, 2007 at 07:31PM
Tuesday, April 24, 2007
By Susan Vinella
Plain Dealer Reporter [HERE]
Three companies violated civil-rights laws by targeting predominantly black neighborhoods in Cleveland for home loans that were likely to result in foreclosure, according to complaints made by a housing advocacy group.
The Housing Advocates Inc. filed the complaints Monday with the city of Cleveland and the U.S. Department of Housing and Urban Development, accusing Argent Mortgage Co., Wells Fargo Bank and First National Mortgage Co. of unfair lending practices.
The agency filed on behalf of 77-year-old Elizabeth Redrick and other black residents whose homes are in foreclosure. Redrick lives on East 147th Street in ZIP code 44110, where the housing agency reported that the population is nearly 74 percent black.
Agency director Ed Kramer said Argent, based in California, made 30 percent more loans in Redrick's ZIP code over three years than in ZIP code 44118, an area in and around Cleveland Heights where residents are 53 percent white.
"Data from across Cleveland clearly show that foreclosures and predatory lending are more concentrated in ZIP codes where the citizens and homeowners are majority African-American," Kramer said.
Argent spokesman Chris Orlando said the company's loans are sold through independent brokers and described the complaints as "completely without merit."
"Our lending decisions are based strictly on objective, statistically proven risk factors," Orlando said.
First National could not be reached for comment. A Wells Fargo spokeswoman said the company is reviewing the complaint.
Argent was the biggest mortgage lender in Cleveland from 2003 to 2005, the latest years for which figures are available. The company made 2,431 mortgage loans in Cleveland in 2005, federal records show.
The complaints say First National served as the broker and Argent issued the mortgages. Wells Fargo then purchased the loans from Argent. The complaints say Wells Fargo knew or should have known that the loans were made under false assumptions.
Kramer, an attorney, said his agency has been overwhelmed by requests for legal help from residents whose homes are in foreclosure.
He said the complaints are meant to elicit help. If city and federal officials find discrimination, they could sue the companies.
Kramer said Redrick, who is divorced and has lived in her three-bedroom home for 37 years, is a typical example of someone who needs help. She refinanced her mortgage to consolidate and pay off $3,600 in high-interest consumer debt.
In a phone interview Monday, Redrick, a retired housekeeper at the Cleveland Clinic, said Argent Mortgage told her she could get a loan through the company that would lower her monthly mortgage from $700 to about $500 - and leave money to pay off her $3,600 debt.
But she said the new mortgage didn't work out the way the terms were explained to her. She said that after paying $5,400 in fees, she was not left with enough money to pay off her debt.
And, Redrick said, her monthly mortgage payments remained around $700.
"That wasn't helping me," she said.
By Susan Vinella
Plain Dealer Reporter [HERE]
Three companies violated civil-rights laws by targeting predominantly black neighborhoods in Cleveland for home loans that were likely to result in foreclosure, according to complaints made by a housing advocacy group.
The Housing Advocates Inc. filed the complaints Monday with the city of Cleveland and the U.S. Department of Housing and Urban Development, accusing Argent Mortgage Co., Wells Fargo Bank and First National Mortgage Co. of unfair lending practices.
The agency filed on behalf of 77-year-old Elizabeth Redrick and other black residents whose homes are in foreclosure. Redrick lives on East 147th Street in ZIP code 44110, where the housing agency reported that the population is nearly 74 percent black.
Agency director Ed Kramer said Argent, based in California, made 30 percent more loans in Redrick's ZIP code over three years than in ZIP code 44118, an area in and around Cleveland Heights where residents are 53 percent white.
"Data from across Cleveland clearly show that foreclosures and predatory lending are more concentrated in ZIP codes where the citizens and homeowners are majority African-American," Kramer said.
Argent spokesman Chris Orlando said the company's loans are sold through independent brokers and described the complaints as "completely without merit."
"Our lending decisions are based strictly on objective, statistically proven risk factors," Orlando said.
First National could not be reached for comment. A Wells Fargo spokeswoman said the company is reviewing the complaint.
Argent was the biggest mortgage lender in Cleveland from 2003 to 2005, the latest years for which figures are available. The company made 2,431 mortgage loans in Cleveland in 2005, federal records show.
The complaints say First National served as the broker and Argent issued the mortgages. Wells Fargo then purchased the loans from Argent. The complaints say Wells Fargo knew or should have known that the loans were made under false assumptions.
Kramer, an attorney, said his agency has been overwhelmed by requests for legal help from residents whose homes are in foreclosure.
He said the complaints are meant to elicit help. If city and federal officials find discrimination, they could sue the companies.
Kramer said Redrick, who is divorced and has lived in her three-bedroom home for 37 years, is a typical example of someone who needs help. She refinanced her mortgage to consolidate and pay off $3,600 in high-interest consumer debt.
In a phone interview Monday, Redrick, a retired housekeeper at the Cleveland Clinic, said Argent Mortgage told her she could get a loan through the company that would lower her monthly mortgage from $700 to about $500 - and leave money to pay off her $3,600 debt.
But she said the new mortgage didn't work out the way the terms were explained to her. She said that after paying $5,400 in fees, she was not left with enough money to pay off her debt.
And, Redrick said, her monthly mortgage payments remained around $700.
"That wasn't helping me," she said.
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