"Any society that would give up a little liberty to gain a little security will deserve neither and lose both." ~ Benjamin Franklin

Really, Wells Fargo Doesn't Want Your House

>> Friday, January 18, 2008

I’m pretty disgusted to see that Wells Fargo is being sued by a city. Not by individuals, but by a city.

The lawsuit accuses Wells Fargo Bank of targeting black homeowners in Baltimore
with high-interest loans and deceptive lending practices, costing the city
millions in tax dollars and resulting in one of the highest foreclosure rates of
any lender in the city.

It is being claimed that Wells Fargo targeted African-Americans with inferior product that has resulted in 313 foreclosures since 2000. (That's 44 per year)

Now, what I see in the quote above is that the city is losing taxes. Because you know that's why they are suing- they really don't care that people are losing their homes...

In another article it reads that

The Mayor and Council have demanded damages to make up for the loss of property
revenue and for the extra costs it has had to incur for providing police
protection to prevent arson and looting. The entire neighbourhood has become
danger zones sitting in the middle of abandoned houses. Suzanne Sangree, who
the chief solicitor of Baltimore city’s department of law, says that the
foreclosure slur on the minority localities cancels all the development work
that had been done in the distressed regions so far

So, people are looting and burning houses... I think that says more about the people than about Wells Fargo.

Baltimore is also stating that Wells is
charging higher rates from black borrowers. It was mostly the blacks that
availed of the sub-prime teaser rates because they did not have the credit
worthiness for prime loans. They had hoped to improve their life style and move
into houses of their own. But with interests doubling and sometimes trebling
they are the most likely to default.

Last I knew the person who approves your loan never actually sees the borrower; all they see is your credit score. The way loans work is quite simple: if you have bad credit you pay a higher interest rate. Race is not a factor- it's a numbers game.

Buying a home is not like buying a car- you can't just walk in and do it in a couple of hours. If you are smart you shop around for loans. You review your options. You do your homework. I just have a hard time believing that all the homeowners had no idea their rates would go up. I'm more likely to believe that it didn't matter to them at the time- and maybe that they purchased a house they couldn't really afford.

And, just to play devil's advocate...If this "crisis" wasn't going on right now and Wells Fargo wasn't writing loans for people who couldn't afford a prime loan do you think they would be sued for discrimination? I don't think it's a stretch to imagine.

Bottom line- banks don't want your home. They don't make money on foreclosures; they make money on interest. It's very unlikely the bank will profit from repossession of any of these homes.

The very bottom line- live within your means. Personal freakin' responsibility, people. Unless we learn it we can look forward to government housing and breadlines for all.


Sincerely Iowa 9:42 AM  

Personal responsibility, indeed. I am 100% in agreement with you, and have some friends of mine that are proving your argument right now. Approved by the bank for a $400,000 mortgage, they built a $500,000 house, and now can't figure out why they are B-R-O-K-E. Oh they put up a good appearance... but I go to bed at night knowing my bills are paid, and I have money in my checking account.

Great post today.

Jill 2:13 PM  

Agree. Just another attempt to shift blame and play the race card. Any perceived problem blacks have they cause and perpetuate themselves. I live with it on a daily basis here in the urban deep south.

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