Wells Fargo gave "Ghetto Loans" to "Mud People"

[Midnight Son]

http://consumerist.com/5283290/affidavits-on-how-wells-fargo-gave-ghetto-loans-to-mud-people

http://www.nytimes.com/2009/06/07/us/07baltimore.html

As she describes it, Beth Jacobson and her fellow loan officers at Wells Fargo Bank “rode the stagecoach from hell” for a decade, systematically singling out blacks in Baltimore and suburban Maryland for high-interest subprime mortgages.

These loans, Baltimore officials have claimed in a federal lawsuit against Wells Fargo (http://topics.nytimes.com/top/news/business/companies/wells_fargo_and_company/index.html?inline=nyt-org), tipped hundreds of homeowners into foreclosure and cost the city tens of millions of dollars in taxes and city services.

Wells Fargo, Ms. Jacobson said in an interview, saw the black community as fertile ground for subprime mortgages, as working-class blacks were hungry to be a part of the nation’s home-owning mania. Loan officers, she said, pushed customers who could have qualified for prime loans into subprime mortgages. Another loan officer stated in an affidavit filed last week that employees had referred to blacks as “mud people” and to subprime lending as “ghetto loans.”

“We just went right after them,” said Ms. Jacobson, who is white and said she was once the bank’s top-producing subprime loan officer nationally. “Wells Fargo mortgage had an emerging-markets unit that specifically targeted black churches, because it figured church leaders had a lot of influence and could convince congregants to take out subprime loans.”
Ms. Jacobson’s account and that of the other loan officer who gave an affidavit, Tony Paschal, both of whom have left Wells Fargo, provide the first detailed accusations of deliberate racial steering into subprimes by one of the nation’s top banks.

The toll taken by such policies, Baltimore officials argue, is terrible. Data released by the city as part of the suit last week show that more than half the properties subject to foreclosure on a Wells Fargo loan from 2005 to 2008 now stand vacant. And 71 percent of those are in predominantly black neighborhoods.
Stay classy now! Can't be giving the banking profession a bad name!

This is such a total surprise, yeah.

[Anaxagoras]

Holy crap. Mud people?

[Lum]

"Mud people" is how white supremacists (specifically, Christian Identity (http://en.wikipedia.org/wiki/Christian_Identity)) refer to non-whites. So that unnamed loan officer at Wells Fargo Baltimore is even more charming a person than you would think.

[MattKeil]

If they're alleging that Wells Fargo was run by white supremacists....

The affadavit says "employees," not "the board of executives."

[Lum]

Yeah, thus my ninja edit, made after I actually read it.

Still enragingly abhorrent, as it speaks to a racist corporate culture in general. WTF, skinhead loan officers?? Clearly Herbert W. Kornfeld needs to regulate.

[MattKeil]

Just stay tha fizzuck off tha Nite Ryda lest you wanna get sprayed.

[Rimbo]

holy fucking shit... "mud people?"

[Lorini]

It may be time to just close my account with them. I haven't been happy with them lately anyway. Anyone know of a for-profit bank that won't call me a mud person?

"The New York Times, in a recent analysis of mortgage lending in New York City, found that black households making more than $68,000 a year were nearly five times as likely to hold high-interest subprime mortgages as whites of similar or even lower incomes. (The disparity was greater for Wells Fargo borrowers, as 2 percent of whites in that income group hold subprime loans and 16.1 percent of blacks.)"

That's just terrible, there's absolutely no excuse. Maybe I'll finally get my 40 acres and mule out of this!

[Anti-Bunny]

It may be time to just close my account with them. I haven't been happy with them lately anyway. Anyone know of a for-profit bank that won't call me a mud person?

Consumer Reports did a study on this and seems to think that small, local banks are the way to go. I've been very happy with mine (at least, until some huge canadian bank bought them out.. but I haven't had any problems since then, either)

[Hanacker]

If you're going to run a branch of your company specifically to screw over black people, it makes sense to hire racists. That's just good business sense.

[malphigian]

They owned my previous mortgage. I just refinanced with PNC who promptly sold it back to Wells Fargo.

Maybe I'll just write angry notes with my checks.

[Eric P]

my bank was purchased by them. i need to seriously move everything over to my usaa account.

[russellmz00]

i just got my fidelity shareholders voting ballot today. there were two proposals:

1) vote for the board of trustees. the board of trustees recommendation was yes to voting for them

2) "procedures to prevent holding investments in companies that, in the judgement of the board, substantially contribute to genocide or crimes against humanity."

the board of trustees recommended a no vote.

i decided to vote no on all the trustees and yes to not substantially helping genocide or crimes against humanity. i guess evil is a growth industry.

[Athryn]

Yeah, if I still had an account with them, I'd be closing it.

[Mark Asher]

i just got my fidelity shareholders voting ballot today. there were two proposals:

1) vote for the board of trustees. the board of trustees recommendation was yes to voting for them

2) "procedures to prevent holding investments in companies that, in the judgement of the board, substantially contribute to genocide or crimes against humanity."

the board of trustees recommended a no vote.

i decided to vote no on all the trustees and yes to not substantially helping genocide or crimes against humanity. i guess evil is a growth industry.

What? They are saying that if they judge that the bank's holdings are in investments that "substantially contribute to genocide or crimes against humanity" you should give your assent to that, more or less?

I'm not even religious, but this applies: ""For what does it profit a man to gain the whole world, and forfeit his soul?"

[deccan]

I'd imagine that the bank currently doesn't have procedures to determine if its investments substantially contribute to genocide or crimes against humanity and if this passes, it would need to start making specific provisions to test for that with all the added costs and legal baggage that entails.

[Rob_Merritt]

Ah Wells Fargo. Hated them for years.

[cesare]

If you're going to run a branch of your company specifically to screw over black people, it makes sense to hire racists. That's just good business sense.

lol.

5

[Miramon]

Ah Wells Fargo. Hated them for years.

QFT...

[Tim James]

Who says mud people? That some sort of D.C.-area term?

[Hugin]

Who says mud people? That some sort of D.C.-area term?

It's pretty standard in white supremacy circles.

[Slainte Mhath]

Wow. This is beyond disgusting. Even setting aside the blatant racism for a moment (a near impossible task), just consider how many of these customers might still be in their homes today had they been granted the prime or FHA loans they qualified for instead of the subprime junk loans Well Fargo steered them into.

This is a prime example of why the banking and mortgage industry should not be left to police itself. I know tossing out words like "regulation" gets one branded a Socialist these days, but I'm pretty sure with an example like this it would be hard to argue that Wells Fargo (and if they were doing this so were others) was doing business with the best intertests of the customer in mind.

[John Doyle]

USAA ftw. They've been a great bank, even while I've been living outside the U.S.

[Midnight Son]

Credit Unions. Not For Profit. Customer wins!

[Miramon]

Credit Unions. Not For Profit. Customer wins!

Generally agree, but remember that "not for profit" just means there is no money going to some third-party owners.

The credit union as an entity still wants to show black ink, naturally, and that comes from selling loans and making investments -- even if much of that black ink will just wind up getting paid back as interest to the members. And the officers of the credit unions may be very well paid indeed, for the larger ones.

But yes, it seems credit unions are usually much more honest and cleaner than banks.

[bago]

remember that "not for profit" just means there is no money going to some third-party owners.

Some would regard that as a feature, not a bug.

[jpinard]

Yep, Credit Union's are great, except when greedy bank transition execs get their hands in. A few years ago Lake Michigan Credit Union started paying off the board with gifts like new trucks, cars etc. The board pushed really hard to get the Credit Union to transition to becoming a bank. The whole process was ridiculously one-sided listing only "Benefits" and no drawbacks for the change. Thank goodness people found out about the gifts and voted the measure down. One of the things they promised was higher interest rates on savings accounts... which ended up being a straight-out lie.

[snowcrash22]

If Alison Lohman hadn't been so prejudiced against old gypsy ladies (thinking she would be a pushover) she wouldn't have had to contend to a demon trying to drag her to hell.

True story.
Wrong forum.

[Dave Markell]

Generally agree, but remember that "not for profit" just means there is no money going to some third-party owners.

The credit union as an entity still wants to show black ink, naturally, and that comes from selling loans and making investments -- even if much of that black ink will just wind up getting paid back as interest to the members. And the officers of the credit unions may be very well paid indeed, for the larger ones.

But yes, it seems credit unions are usually much more honest and cleaner than banks.

Yup. My wife and I refuse to bank anywhere but a local credit union. We've belonged to 4 over the last decade (lots of moving) and liked them all. If you want to avoid getting gouged by fees and hate being treated like the bank is doing YOU a favor by taking your deposit, join a credit union.

[Enidigm]

I'm going to start looking for a new bank. Wells Fargo has always treated me pretty well, but this is beyond the pale, in more ways than one.

[EvilIdler]

Wow. I thought even racists evolved their language in a century. I was wrong.

[unbongwah]

Apparently Wells Fargo didn't get the memo about racism being dead (http://www.quartertothree.com/game-talk/showpost.php?p=1759444&postcount=46).

[Tim James]

Apparently Wells Fargo didn't get the memo about racism being dead (http://www.quartertothree.com/game-talk/showpost.php?p=1759444&postcount=46).Would you stop? You're actually proving one of StGabe's points since this is anecdotal evidence on a small scale.

I'm not ready for the end of the world yet.

[unbongwah]

Put together enough anecdotal evidence and it ceases to be purely anecdotal.

[Tim James]

Put together enough anecdotal evidence and it ceases to be purely anecdotal.Oh I know. It's how we gun rights activists make it through the day, haha!

[unbongwah]

Maybe we need a tea party to commiserate.

[Nellie]

was doing business with the best intertests of the customer in mind.
No, no, no, no, no.

You do business with the best interests of the Shareholder in mind.

[Lizard_King]

Would you stop? You're actually proving one of StGabe's points since this is anecdotal evidence on a small scale.

Taken on its own, it's an example of why racism on the part of a majority group is a very significant event with potentially vast consequences. A small amount of racism (in the grand scheme of racial crimes and beliefs) motivating a group of people with a moderate amount of power has had a very significant impact. Contrary to what you are saying, this is the kind of indicator that should suggest that racism as an issue with profound relevance is anything but dead.

Like I've said before, a small amount of indifference towards minorities on the part of George W. Bush or someone like him matters much more than all of the seething hatred that a Louis Farrakhan can muster. It will continue to be that way for a long time, and being in denial about it doesn't help. It's not about trying to create an arbitrary equivalence between the magnitude of different kinds of prejudice, but rather making sure that we are always cognizant of the relative material consequences of beliefs before we presume them to be problems of a bygone age.

[davidf]

Would you stop? You're actually proving one of StGabe's points since this is anecdotal evidence on a small scale.

I'm not ready for the end of the world yet.

I'm really confused by this statement...was is it your saying? Are you challanging the believablity of this article?

My understanding of the word anecdotal evidence is that its information that is not based on facts or careful study. I looked it up just to be sure...and thats the defintion my webster's gives me.

After reading the article...several of the loan officers admited that they perpetrated wrongdoing in fleecing the citizens. So is the challange to the factualness of the story about the racist element? I suppose it is Hearsay, since there is no writen evidence, but I would assume that the targeting of a certain ethnic community by these loans, people who should have qaulified for better than subprime would make the entire argument rise to the level of actual evidence.

Now if you're making the argument this is a isolated incident, that's a diffirent discussion. :) but requires the removal of the word anecdotal

[Jupiter Jones]

I liked Wells Fargo better when they were named "Crocker Bank" (locally) and had "Deputy Tellers" (the first ATMs) inside the building. I always wanted to get a "Crocker Spaniel" stuffed dog when I opened my first bank account, but just before I had saved the requisite $50 of allowance to get one, Wells Fargo bought them and ended the program. Bastards.