The City of Philadelphia recently filed a complaint against Wells Fargo Bank. Wells Fargo is alleged to have violated a 1968 Act regarding Fair Housing. However, they deny these allegations stating that the claims on them using greedy banking practices towards mortgage borrowers are unsubstantiated. The City of Philadelphia stated that Wells Fargo intentionally made their black and Hispanic customers get into riskier loans that had high-interest rates. This is even after they had qualified for mortgages that were of low-interest rates and offered lower risks. To top up on this, the bank went further and made it difficult for these borrowers to later refinance the mortgages.
The city had researched on this matter for over a year. They had analyzed Wells Fargo data on loans that had span for over 10 years. They later realized that black and Hispanic borrowers had a higher likely hood of getting into higher interest loans than white borrowers. Regardless of white customers having the same credit ratings with both the black and Hispanic borrowers. This according to Philadelphia resulted in increased foreclosure rates of 4.7 times by the minority neighborhoods. This occurrence ran from 2004 to 2014.
These redlining practices by Wells Fargo Bank date back to the 1930s. Banks would draw a red line around people who lived in certain neighborhoods. These individuals belonged to certain ethnic groups or races. This was later prohibited by the constitution and is therefore illegal. Wells Fargo Bank denied creditworthy customers access to loans due to their ethnic backgrounds and skin color.
The City of Philadelphia has a large minority population when compared to other cities in the United States. 43% of the population are blacks and 12% are Hispanic, that’s according to the United States census that was done in 2010. The lending malpractices by Wells Fargo has had a negative impact on the City of Philadelphia since many borrowers who later applied for refinancing of their mortgages were declined and they later lost their homes to foreclosure. The city experienced low property values, high rates of crime and vandalism in the affected neighborhoods.
Karl Heideck is an attorney from Philadelphia who deals with a range of contractual services to the people in and around Philadelphia. He has been listed from April 2015 by the Hire Counsel. Karl Heideck holds a Bachelor of Arts degree and a Juris Doctorate degree in law from Swarthmore College and Temple University’s James E. Beasley School of law respectively.
Karl Heideck has valuable expertise when it comes to the filing and responding to complaints. He has pursued various cases relating to general law in pretrial, post-trial, and personal jurisdiction venues. Karl Heideck is also a writer who mainly focuses on blog posts on legal developments in Pennsylvania.