Breaking News
wells fargo contests mortgage discrimination claims requests response extension 64

Stock Market

Wells Fargo Contests Mortgage Discrimination Claims, Requests Response Extension


Lauren Miller

March 6, 2024 - 00:23 am


Wells Fargo Seeks Delay in Responding to Allegations of Racial Discrimination in Mortgage Lending

SAN FRANCISCO, March 5, 2024 /PRNewswire/ -- Wells Fargo Bank, N.A. (Wells Fargo) has taken decisive legal action as it confronts significant allegations in a class action lawsuit, which accuses the bank of discriminatory mortgage lending practices against minority homebuyers. The financial institution has put in a legal request for additional time to craft a thorough rebuttal to three expert reports presented by the plaintiffs. These documents are key elements in the case which claims that the bank engaged in racial discrimination adversely affecting Black, Latino/Hispanic, and Asian American homebuyers.

In the detailed motion filed, Wells Fargo articulated an essential requirement for extended time to adequately "understand the bases for Plaintiffs' expert opinions" and put forth a strong argument emphasizing the severe harm and prejudice the bank would face should the court deny the enlargement of time to respond.

This request was filed on March 4, preceding Northern District of California Federal Judge James Donato. Wells Fargo’s proposal indicates growing concerns about the strength of the evidence and the possible implications of the proofs the Plaintiffs are expected to introduce. These are deemed to support their claims on behalf of an approximate 750,000 potential class members in total. Specifically, the bank has requested Judge Donato for an allotment of three additional weeks to reply to the expert analyses provided by the Plaintiffs' representatives.

Details of the Discrimination Allegations

The case, officially recorded as In Re Wells Fargo Mortgage Discrimination Litigation, Case No. 3:22-CV-00990-JD, revolves around serious accusations. The suit asserts "that Black and other minority applicants were intentionally and disproportionately turned down, subjected to unwarranted delays in their application processes, and received less advantageous loan terms compared to other applicants. The systematic nature of these practices echoes a modern form of redlining, causing detrimental repercussions based on race and ethnicity," as expressed by Dennis S. Ellis of Ellis George LLP, who plays a pivotal role as the leading attorney appointed by Judge Donato to spearhead the litigation against Wells Fargo.

Wells Fargo's Refinancing Approval Rates Under Scrutiny

The light was shed on these practices following an investigative report by Bloomberg on March 10, 2022, which unveiled that "Wells Fargo Denied More than Half Its Black Applicants in Refinancing Boom." The report, drawing data from information Wells Fargo was mandated to disclose under the Home Mortgage Disclosure Act (HMDA), showed that while a vast majority of White Americans benefitted from historically low-interest rates, Wells Fargo's approval rates for refinance applications from Black homeowners stood at just 47%. In comparison, approval rates were 53% for Hispanic/Latino applicants and 67% for Asian-American applicants. These numbers starkly contrast with the respective rates of approval for the same ethnic groups from other lending institutions, which were 71%, 79%, and 85%.

"It is clear that Wells Fargo harbors grave concerns regarding the expert evidence which the Plaintiffs have submitted to bolster their case. The evidence will substantiate the motion to certify a class for the aggrieved minorities who have been subjected to Wells Fargo's prejudiced lending practices," Dennis S. Ellis mentioned. He further showcased the bank's missed opportunities to recognize and amend the harm its lending policies were inflicting on minorities. Instead, the bank continued to perpetuate policies that led to the denial of loans to minority citizens at overwhelming disparities compared to White Americans. Ellis vehemently disagreed with the notion of granting Wells Fargo any extension to counter the Plaintiff’s experts. He found it alarming that Wells Fargo, years after implementing discriminatory policies that inflicted significant damage on minority home loan applicants, still lacks a response to its actions.

Prior Allegations and Regulatory Scrutiny

The allegations filed against the San Francisco-headquartered bank regarding its mortgage rates are not isolated. In a discerning revelation last year, the Consumer Financial Protection Bureau (CFPB) notified Wells Fargo of issues associated with its mortgage rate discounts. The Bureau's examination uncovered "statistically significant disparities" in the frequency with which Black borrowers received pricing exceptions in comparison to other customers. Moreover, the CFPB determined that the bank's defiance of the law led to substantial financial damages to its customers, resulting in the confiscation of their vehicles and homes for thousands. Following this disclosure, the CFPB mandated Wells Fargo to provide over $2 billion in restitution to consumers and imposed a $1.7 billion civil penalty for transgressions occurring across several of the bank's core product lines.

Despite these serious charges, Wells Fargo, when pressed by CNBC for a statement, refrained from directly addressing the specific allegations. The bank rather reiterated its supposed commitment as being "proud to be the largest bank lender to minority families."

Ellis juxtaposed this recent claim made by Wells Fargo against similar declarations presented in the litigation before Judge Donato. He suggests that their pride in being the most significant lender to the Black community might be seen as an attempt to deflect from the undeniable long-term harm their lending practices have incurred on communities of color. "The only verifiable claim that Wells Fargo can hold as number one in, during the time frame covered by our lawsuit from 2018-2022, is in denying more Black applicants the chance to achieve the American dream of home ownership by dismissing their loan applications, often on discriminatory grounds," stated Ellis.

HMDA's Startling Revelations

From a detailed scrutiny of the HMDA records, Ellis brings to light that Wells Fargo denied mortgage loans to over 73,000 Black applicants over the course of the four-year period covered by the lawsuit.

Advocates for Civil Rights Join the Legal Battle

Prominent civil rights attorney Ben Crump, who is co-counsel on this legal matter, reinforced the gravity of the case by pinpointing the critical role of systematic racial discrimination in homeownership and financing. According to Crump, these factors play a pivotal part in amplifying the sharp discrepancy in generational wealth between Black Americans and other racial groups. "It is deplorable that Wells Fargo perpetuates such behavior into the 21st century. This case is about securing justice, not solely for the plaintiffs named in the suit, but for every Black applicant or homeowner who Wells Fargo rejected due to racial bias," stated Crump. He emphasized the importance of proceeding without further delay in the quest to hold Wells Fargo accountable for their transgressions.

Legal Contact Information and Case Documentation

For those interested in reviewing the complaint in full detail, it is publicly accessible HERE.

Relevant legal contacts include:

  • Sam Singer Singer Associates Public Relations Email: [email protected] Phone: 415.336.4949

  • Trent Copeland, Esq. Ellis George LLP Cell/Text: (310) 569-6232 Email: [email protected]

  • Dennis S. Ellis, Esq. Ellis George LLP Cell/Text: (213) 840-5001 Email: [email protected]

  • Source: Ellis George LLP

In conclusion, as Wells Fargo seeks an extension to counter the expert evidence which could potentially be a turning point in the case, various stakeholders from the Plaintiffs' team to influential civil rights attorneys stand against any further delay. The outcome of Wells Fargo's request for additional time could significantly impact the pace of the trial and potentially alter the balance of the case, as it addresses systemic racial biases in the banking industry.