Wells Fargo Accused of 'Reverse Redlining' Against Blacks with Unfair Loan Terms in Ohio

From [HERE] The Ohio Civil Rights Commission is accusing Wells Fargo of discriminating against African-Americans seeking home loans by practicing what it called “reverse redlining.”

In a lawsuit filed by Ohio Attorney General Michael DeWine, the commission charges that Wells-Fargo offered African-Americans loans that had “abusive and grossly unfavorable terms” that it said were likely “to have a detrimental effect on African-American neighborhoods.”

The term “redlining” has historically been used to describe banks refusing to make home loans in minority neighborhoods. “Reverse redlining,” the Ohio commission said, amounts to selling African-Americans “abusive and detrimental loans.”

The suit charges that the terms of the loans were so unfavorable that there was almost no likelihood the borrowers would be able to repay them.

Wells-Fargo has “taken advantage of” minority borrowers by its willingness to make, purchase and service mortgages containing abusive and detrimental terms and that are in excess of the market value of residential properties that secure them.”

The named plaintiff in the suit is Latonya Sykes-Jackson, who lives in a section of Warrensville Heights, Ohio, that is defined by the U.S. Census as 96.6% black.

The suit says that Sykes-Jackson refinanced her home, replacing two existing mortgages that totaled $111,642 with a new mortgage, later bought by Wells-Fargo, that totaled $122,700. The new note called for 359 monthly payments of $1,009 and a final balloon payment of $87,292 on February 1, 2037.