More on Baltimore v. Wells Fargo
I've got a story today about the suit. Read it here, or get a taste below:
Baltimore's lawsuit against Wells Fargo for its subprime mortgages has stirred up frustration among industry players, who say they're increasingly taking heat for offering loans in poorer and minority neighborhoods despite being urged for years to do just that.
Others speculate that these sorts of suits -- Cleveland just announced one against 21 lenders and investment banks -- could have the unintended effect of dampening lending in urban areas.
But the subprime lending that urban areas saw during the housing boom was far more harmful than helpful, housing advocates say. Many of the loans, which have higher interest rates to account for higher risk, also came with high prepayment penalties, no escrow accounts for property taxes and adjustable interest rates. John Taylor with the National Community Reinvestment Coalition, quoted in the story, has some interesting things to say about the subprime boom.
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Comments
Once again the politicians are looking for deep pockets to blame when the failures are directly the results of poor individual decisions.
Will we ever live in a society in which people are responsible for themselves?
Posted by: NoFreeRides | January 12, 2008 8:14 AM
Yes, that is the free market and private initiative: to brag when you are winning, and whine and call for others to pay when you lost...
Posted by: Jim McMillan | January 12, 2008 8:43 PM
Some people have no clue to what is going on and the magnitude of what this city is trying to do. Baltimore has a lawsuit against one of the most conservative lenders out there. Do you want to start this??? If this lawsuit even touches the courts and Wells Fargo loses money then guess what... You will not have to worry about foreclosures becasuse your city that you love will be one big apartment complex.
HOMEOWNERSHIP IS NOT A RIGHT IT IS EARNED!
Posted by: wow... | January 13, 2008 11:03 PM
Jim calls Wells Fargo the most conservative lender out there. Note that Wells Fargo was number 1 in subprime loans for 2007. Wells Fargo had been originating subprime loans since late 1997. They were doing 100% financing for borrowers with credit scores down to 580 with 50% debt to income ratios using a 2/28 ARM. The borrower didn't have to debt to income ratio in 2 years when the ARM adjusted. These loans did not require escrows for taxes and insurance. Wells Fargo also did no income, no asset, no employment loans up to 95%. These were considered Alt A loans. Would you loan 95% financing to someone based on credit score only, not even knowing if they had a job? Wells Fargo did.
Posted by: Liz | September 29, 2008 2:07 PM
Wells Fargo was number one subprime in 2007 because everyone else was out of business. Wells was one of the most conservative lenders and by limiting 100% financing to 580 FICOs they stayed far above the 460-500 FICOs at lenders made famous at Implode-O-Meter .
Just because the fiscally irresponsible lenders are out-of-business does not justify attacking the more fiscally responsible lenders.
Posted by: Heli | April 16, 2009 5:04 PM