As it appears, prior to the subprime loaning collapse, certain employees at Wells Fargo made it a special point to deal with “mud people” by issuing them “ghetto loans.” Un-freaking-believable:
As she describes it, Beth Jacobson and her fellow loan officers at Wells Fargo Bank “rode the stagecoach from hell” for a decade, systematically singling out blacks in Baltimore and suburban Maryland for high-interest subprime mortgages.
These loans, Baltimore officials have claimed in a federal lawsuit against Wells Fargo, tipped hundreds of homeowners into foreclosure and cost the city tens of millions of dollars in taxes and city services.
Wells Fargo, Ms. Jacobson said in an interview, saw the black community as fertile ground for subprime mortgages, as working-class blacks were hungry to be a part of the nation’s home-owning mania. Loan officers, she said, pushed customers who could have qualified for prime loans into subprime mortgages. Another loan officer stated in an affidavit filed last week that employees had referred to blacks as “mud people” and to subprime lending as “ghetto loans.”
“We just went right after them,” said Ms. Jacobson, who is white and said she was once the bank’s top-producing subprime loan officer nationally. “Wells Fargo mortgage had an emerging-markets unit that specifically targeted black churches, because it figured church leaders had a lot of influence and could convince congregants to take out subprime loans.”
Ms. Jacobson’s account and that of the other loan officer who gave an affidavit, Tony Paschal, both of whom have left Wells Fargo, provide the first detailed accusations of deliberate racial steering into subprimes by one of the nation’s top banks.
If there was ever a time when I truly prayed I was wrong, this would be it. Stories like this simply cannot be true in a “post-racial” American, can they?
I’ve had my suspicions all along that while there were poor and minority people taking out mortgages who really WERE greedily living beyond their means, there were others who were simply seeking quality and livable housing. People in those predicaments were lured in with predatory loan traps. But I had no idea that this kind of behind-the-scenes activity was going on.
Eff it. I think I’m going to keep renting.