Fair Housing Attorney Welcomes, Encourages Feds In Effort To Pursue Alleged "Ghetto Loans" Peddlers Engaging In "Reverse Redlining"

The New York Times reports on the recent decision by the U.S. Justice Department to increase its focus on discrimination in the area of home loan originations. The following excerpt describes the efforts of one Washington, D.C. civil rights attorney who is currently pursing a large, high profile lender accused of reverse redlining in originating home mortgages on behalf of two cities:

• John Relman, a housing lawyer, said there was plenty of evidence that some banks violated fair housing laws during the subprime boom. Mr. Relman has helped the Cities of Baltimore and Memphis sue Wells Fargo over the costs taxpayers incurred because of foreclosures. As part of those lawsuits, he obtained affidavits from former Wells Fargo loan officers who said the bank had systematically singled out minority borrowers for high-interest, high-fee mortgages, bypassing its own underwriting rules. The State of Illinois has also sued the bank.

• Wells Fargo has denied any wrongdoing. Last week, a judge dismissed Baltimore’s lawsuit, saying there were too many other causes of the damage to inner-city neighborhoods to blame the bank. Mr. Relman said the city intended to file a new complaint that focused more narrowly on recouping costs associated with specific properties.

• But it is much easier for the federal government to sue banks like Wells Fargo. Mr. Relman said he hoped the Justice Department decided to join the cases. “Not only would we welcome them; we encourage them to get involved,” Mr. Relman said. “It’s long overdue.”

Source: Justice Dept. Fights Bias in Lending.