Wells Fargo loan customers in minority communities in Los Angeles filed a class action lawsuit against the lender on Friday, August 5, charging Wells Fargo with discriminatory loan practices. The complaint says Wells Fargo consistently and knowingly discriminated against borrowers in minority neighborhoods resulting in borrowers paying more for their loans than borrowers in other parts of Los Angeles County. This could affect up to 10,000 borrowers in minority communities.
According to the complaint, Wells Fargo introduced a program in 2002 called "Loan Economics." The program gave loan officers the authority to offer discounts to loan applicants that lowered overall loan coasts. The program made Wells Fargo's loan packages more attractive to potential customers in a highly competitive refinance market. The discounts included lower application and origination fees and lower mortgage interest rates. However, this package was alllegedly not made available to branches located in minority communities.
The suit charges that Wells Fargo's loan practices violate a host of laws designed to protect borrowers including the Fair Employment and Housing Act , the Unruh Civil Rights Act, the Holden Act, the Consumer Legal Remedies Act and the Unfair Competition Law.
Members of the class are seeking $4,000 in damages per affected loan. In order to qualify as a class member mortgagors must have obtained a first-lien mortgage from Wells Fargo Bank or Wells Fargo Home Mortgage branches in specific portions of Los Angeles County between May 2002 and December 2005, for amounts in excess of $150,000.
