"Wells Fargo to pay $175 million to settle lending bias case" by Charlie Savage | New York Times, July 13, 2012
WASHINGTON — Wells Fargo, the nation’s largest home mortgage lender, has agreed to pay at least $175 million to settle accusations that its independent brokers discriminated against black and Hispanic borrowers during the housing boom, the Justice Department announced Thursday....
An investigation by the department’s civil rights division found that mortgage brokers working with Wells Fargo had charged higher fees and rates to more than 30,000 minority borrowers across the country than they had to white borrowers who posed the same credit risk, according to a complaint filed Thursday along with the proposed settlement.
Wells Fargo brokers also steered more than 4,000 minority borrowers into costlier subprime mortgages when white borrowers with similar credit risk profiles had received regular loans, a Justice Department complaint found. The deal covers the subprime bubble years of 2004 to 2009.
And then there are those who receive special loans.
Thomas Perez, the assistant attorney general for the civil rights division, said the practices amounted to a ‘‘racial surtax.’’
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Wells Fargo admitted no wrongdoing. In a statement, the bank also announced that it would no longer finance mortgages through independent brokers and noted that it had ceased making subprime loans in 2008.
“Wells Fargo is settling this matter because we believe it is in the best interest of our team members, customers, communities, and investors to avoid a long and costly legal fight, and to instead devote our resources to continuing to contribute to the country’s housing recovery,’’ said Mike Heid, president of Wells Fargo Home Mortgage....
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Related: Wells Fargo may send jobs to India, Philippines to cut costs
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