More on Baltimore v. Wells Fargo
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.