2 counties in MD accuse banks of predatory lending to minorities

ROCKVILLE, MD – Montgomery and Prince George counties on Tuesday filed two federal lawsuits against Wells Fargo and Bank of America for alleged violation of federal fair housing law through various predatory lending practices. The counties say the banks and their acquired entities knowingly sold African American and Latino borrowers higher priced mortgages, and many loans were doomed to fail.

The two counties are seeking damages and injunctive relief against the banks and its entities – including Merrill Lynch, Wachovia Corporation and Countrywide Financial Corporation, according to a statement.

Montgomery County Manager Ike Leggett said banks are responsible for granting “tens of thousands of potentially predatory and discriminatory mortgages” to borrowers since 2000. Both counties accuse banks of directly granting loans or helping other businesses – such as AmeriQuest Mortgage Company and accredited home lenders – to create them, according to a statement.

Specifically, Leggett said Merrill Lynch and Countrywide Financial Corporation are “responsible for at least 97,500 potentially predatory and discriminatory mortgages” in the two counties. Wells Fargo, Leggett added, is “responsible for over 56,000 loans.”

“The discriminatory housing equity stripping practices practiced by banks and their affiliates have caused great damage to our communities,” said Leggett. “Bank of America’s abusive mortgage practices continue to this day. We cannot allow this to continue to hurt the county’s finances and shift the costs for which the defendants are responsible to our taxpayers. “

In a statement, Leggett said banks had discriminated against the homes of minority borrowers.

“Discriminatory housing practices by credit bureaus have resulted in an increase in vacant homes and foreclosures which have hurt both counties due to increased out-of-pocket fees for county services incurred in dealing with foreclosures and costs associated with the identification, maintenance, repair, monitoring and demolition of foreclosed, abandoned and / or vacant properties, “Leggett said in a statement.” In addition, the counties were damaged by the ‘erosion of the tax base, loss of property taxes and other revenues, and by the resources they have had to move to combat the urban scourge and the effect of racial segregation on their respective communities and neighborhoods . . “

A Bank of America spokesperson said “the allegations are baseless.”

“The claims are unfounded and we will vigorously defend our interests in this matter,” the spokesperson said. “There is no basis for the complaint and the Bank of America record demonstrates that we have a strong commitment and a strong track record in fair lending.”

Patch has contacted Wells Fargo but has not had a response at the time of publication.

This story can be updated.

Image via Shutterstock

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