As for stirring the 'racial pot', they were simply passing on the information as listed in affidavits released as byproduct of an ongoing trial in Baltimore. I think it qualifies as 'reporting'.

WAKE UP PEOPLE!

@Skankingmike: Since WF is the only superbank making money in the US right now, I would think that was obvious. WF lent out 75 billion against the 25 billion in TARP funds. Since that is the case, that would make it awful hard to use that money to buy another company. Not to mention the whole Chase lawsuit that happened as part of the Wachovia buyout.

IMHO the split of the responsibility is much more on the side of the receiver than the giver. If you disagree, cool!

In Canada, if anyone asks me my race, marital status, cultural heritage, religion; whether they are a bank or a potential employer or anyone else, I have the right to refuse to answer the question. I have been in a job interview and had to say "I'm sorry, but it's illegal for you to ask me that question" and I still got the job. (didn't stay there long though)

At the bank, the loan process is colourblind. The Skeksis and Vogons who live under the bank and stamp the loans don't care what you are, you are just a 3-digit FICO score to them.

@flipnut:

It's easy to sit on an ivory tower of being priveledged and educated and blame the consumer. However, put yourself in someone else's shoes and try to see it from another angle. These people may not have had the experience, advice, or education to read the mortgage papers. Even people with college degrees can have trouble sifting through those things. They are chock full of legalease and confusing terminology. The average home buyer isn't well versed in that type of document; especially with the sheer magnitude of a mortgage agreement.

Also, think about it this way... these are people who WANT a home... they want to have the American Dream... when someone puts that opportunity in front of them, many people will not think as practically and objectivly as you obviously would. Good for you, but have some thought as to other people's state of mind during that process. Excitement and elation at getting a home is overwhelming.

Also.............. and here's the big point........ it's NOT JUST ABOUT THE LOANS!!! It's about a corporation having blatently racist policies and are now getting brought into the light over it. Consumer fault or not, you can have that opinion.... however, I can't see how anyone in their right mind would consider a company's policies having racial differences being ok.... and that is the crux of this.

I can probably find you examples of mud to match almost any skin tone.

that's like blaming Obama for the first bail out.

Which is a bit misleading. One employee in one location heard an indistinct number of employees use racist language. When mentioned again, the loan officer says that "they" used these terms, but it's still not clear who "they" are.

So using the "mud people" line to claim it was racially motivated might be a bit off the mark.

Clamjuice -- More damning are the actual numbers quoted in the article, which show a higher number of subprime mortgages going to minority borrowers, even when said borrowers made more than $68K/year. Of course, that's in NYC - someone else would have to tell me where $68K falls in the NY world. I know it's more than I make, yet I got a fairly good mortgage on my home (not in NY).

Also damning are the supposed "cash incentives to aggressively market subprime loans in minority communities."

These actions speak far louder about the racial motivations, IMHO.

even worse than that, in some of these cases, the banks were outright lying to the customers about the terms of their mortgage. they were providing manipulated HUD1s & misrepresenting balloons, reverse-am's & i/o's as traditional 30yr fixed loans.

Here's a great quote to back up what I'm trying to get across: "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." I would like someone to explain to me how that is not racist.

@Munchie: ...Dude, the story itself is almost too crazy to believe ("mud people"?!)< why the fuck would they need to change anything to make it seem even worse than it already is? Oh, that's right, because you're racist.

@RamV10: LOL, except well-off BLACK people were also targeted. Pls to explain how that is not racist, kthx.

@Rugbydan:

I don't think racism was a factor here. It's just another example of the class warfare that has been going on for hundreds of years in the US.

Right, because calling them "mud people" isn't racist at all!

Next time you see whistleblower-protection legislation, vote for it, eh?

Jesus, there really ARE some fucking neanderthals left in this world I guess.

Why can't people see that? equality sure but where do you draw the line.

language controls our lives, and by specifically putting certain languages in government documents you change our thoughts towards them.

If you tell kids we are all unique then tell them we're all the same then tell them we're all the same but some people have less so we afford them more ways to get to the same point than you. How do you think they will grow up?

3% of what? how many blacks voted before how many voted now?

I'll just stop because most of you don't understand obviously and I'm not getting my point across.

Oh, right, IT'S A MAGICAL FANTASY WORLD.

Black people overwhelmingly voted for Obama because black people overwhelmingly vote for Democratic presidential candidates.

There's a reason many black people don't go to the FHA for loans - there's a terrible history there.

I mean, seriously, say what you want to say instead of hiding behind the questions.

@baristabrawl: Like a buy-"here/pay-here; no credit/bad credit = good here" autodealer but just for homes, rowhouses, and condos...

Not that I'm saying it's not at all a race thing, but if east Baltimore was full of poor white people they'd have done the same thing to them.

One word can sum up the reason some of these people didn't want to provide income verification though: Drugs.

@Eyebrows McGee (now with more baby!): Excellent post Eyebrows McGee!

@Shadowman615: Obama was the best branded candidate. An empty suit like the rest of the candidates pushed by the two major business owned politicial parties...

If you don't believe the business owned part look at the donar list for the Comission on Presidential Debates - which somehow limits the debates to only those two parties...

@ARP: Yeah, the "welfare queens" whose upkeep was minute compared with the corporate tax breaks, tax concessions, training funds, etc that were/are "business welfare".

I think what Wells Fargo did was horrible and to protest their actions I'm taking my money to a Credit Union.

That said I still think Race is a stupid human construct and I try to ignore people when they point out "racial differences" good or bad.

@Rugbydan: You should give out raffle tickets for a HDTV compliant big screen TV. Guarrenteed attendance...

@Luckwouldhaveit: The same businesses who give bank accounts and credit cards to illegal immigrants loved giving them home loans too...

@Jessica Haas: I believe these type of loans were called stated-income loans which were originally where a person was an independent sales rep on commission or making money from 1099 type contracting work so that the supposed burden of proof was on the applicant versus using a W-2...

@kmw2: That's fraud, and if proved should result in that lending officer going to prison.

The bank should also alter the system so that employees can't change the credit report.

@ARP: Bascially, they were the tiny percentage of people that managed to game the system.

But they're the ones that suck most of the money out of the system, getting rid of them would leave far more money for the actual deserving.

Orange County, CA: 45% (another looking at child-only says 27%).
Sorry, don't have the links, but both Florida and Texas once reported that welfare/medicare fraud levels were around 30% back in the '90s.

With fraud rates so high, you can easily argue that more investigation is needed to prevent it.

So explain to me how one does not offset the cost or even was planned use for the other?

[www.sph.umn.edu]

@Firethorn: On the rich - They're not only frugal; they know how to make a dollar grow via investment and other means.

@Rugbydan: The truth is very few people show up. Most people don't want to be bothered.

I've heard that a lot more are showing up now. Personally, I'm going to shop long and hard when I go for a major home loan - when a single percentage point can add up to thousands of dollars, it's worth it to pay attention.

But then, I'm of the mind that the difference between classes - low, middle, high, is more due to spending patterns than income. The poor tend to be poor money managers. Middle class, a good sight better, mostly avoiding pay day loan places and such. The Rich? Relatively speaking, very frugal.

@dukegreene: I'm conflicted. I thought we were living in post-racial America now that we have a black president. I'm not sure what to believe anymore.

It's pretty stamped out throughout the country, but there are still some nasty boils here and there.

A big part of the difference is that 'Black neighborhood' is pretty much the same as 'poor neighborhood' most of the time. And you DO market differently to poor people. Hell, I have some cousins that qualify as 'poor while trash' and engages in the same activities that get poor blacks into trouble.

@Trai_Dep: I don't care if I agree with you or not...that was just dang funny!

"Get your Tall Boys here!!! Only $100,000!!! Can't afford that? We have Schlitz for %50,000!!!"

Sadly though, guroth is partially right. Sadly, so is Justin....it's a nasty world we live in people and you can't protect people from themselves...

@Skankingmike: Incorrect on the use of the TARP fund. Wells lent more than triple what it was given as part of the whole TARP fiasco. What I can tell you now is that anyone who had this kind of thought going through their head, the racism especially, was probably already fired and blacklisted because this kind of crap doesn't last long in a company like Wells. They have a long standing record of pushing diversity and they are downright MEAN when they find people doing this kind of crap that work for them.

@mac-phisto: in a word, CHA-CHING!

Exactly. For such customers, the extra 3% is pure profit.

Still, such sheniagens should have been controlled by the market - Wells Fargo offers a subprime loan, bank Y or Credit Union X offers a prime, the customer sensibly doesn't use Wells Fargo.

Still, the article seems odd to me - it's written almost like a parody, and Wells Fargo was relatively unaffected by the subprime crisis.

@Trai_Dep: You are an expert on sweeping generalizations. Take your own advice.

Yes, even though they went to predominately Black churches to try and recruit the preacher to help them secure loans, or that a White person with the exact same credit rating/income got a better loan, or that middle- and upper- class Blacks got subprime loans regardless of their credit rating/income, racism was definitely not a factor.

The truth is very few people show up. Most people don't want to be bothered.

The rich prey upon the poor.

Basically "Too big to fail" means "You let us fail and we all lose in the end."

Banks are scummy? WHAT? Never!

People are uninformed in their decision making process? Surely you jest?!

Just when you think people have run out of scams along come faster, more costly ones.

How exactly does the last presidential election "prove" anything you said? Do you have any proof the election was won based on your theories?

@dragonpup: If someone says that you don't need to read this binding document you need to drop everything and run. It is a sure sign that you will be screwed. For that matter anyone trying to make me trust them I.e. cross on business card/ car and "I am a good (insert religion here)" is going to screw you.

@dukegreene: *clicks heart by name*

Go Purple and Black!

If you have proof then expose them.

@wvFrugan: Unlikely

This country puts so much emphases on race (which is a made up construct) that most people will cling to it. The last presidential election proves this. Black people voted in droves for Obama not because he was their best choice but because he was the first black man that ran that could win (possibly). And then he got the White guilt vote. just like you feel, you feel guilty for something you don't practice? It's sad but you actually play right into this stupid construct the "man" as created to keep people down.

If you resist people that much who hate then you only further create a divide.

It's a great lovely circle.

These people were targeting "mud people" for "ghetto loans," according to their own loan officers. I am usually the last one to play the race card, but this was absolutely blatant.

@Trai_Dep: I don't think you understand. You find the small percentage of people that were idiots and you make them out to be the norm. You use that to prevent regulations, prevent prosecutions, and/or to prevent any sort of assistance programs.

You may not remember, but back in the 80's, Reagan demonized "welfare queens." Bascially, they were the tiny percentage of people that managed to game the system. However, Reagan successfully managed to portray most who were on welfare as people who were gaming the system.

If you do give a minority a loan that they don't qualify for then it is affirmative action.

If said minority defaults on said loan then it is racism.

Well played.

@kolacek:
I believe that finally enough white folks like me are sick of this shit happening and refuse to look the other way. The toll this is taking on our society is ruining all of us, not just its direct victims. I have long ago stopped letting the man victimize the poor, disabled, minorities, & children/elderly without my protest. If I know you are doing any of this crap, I'll flame you regardless of who you are, family or friend (former) or other regardless.

Just like just about everybody else in the financial world who WASN'T raking in big bucks doing crap like this.

But sabotaging people with income and a credit history good enough to qualify for a prime loan goes beyond unethical and illegal into evil territory.

Lots of companies making "market decisions" get to externalize costs and push them onto bystanders, taxpayers, third world countries, whatever.

This, Wells Fargo, is just the cost of doing business. That's what your business practices cost. We're just not going to let you push that cost off on someone else.

@flipnut: I don't know if you've ever read a mortgage agreement, but those things are nigh impossible to read to those not proficient in the legalesse. And I can see a subprime lenders telling a customer that they don't need a lawyer, the bank's lawyer is all they will ever need.

Why? To scare black, asian and latino customers into dropping legitimate claims and save the company millions of dollars.

Every time I have see a Bill O'Reilly or a Sean Hannity on the TV railing against "handouts" to suffering homeowners I want to go on a shooting spree at Faux News.

Banks, insurance companies, law enforcement agencies...pick one. They know what they've done to minorities in the past and they know what they continue to do to minority citizens. Try being a white guy in their employ and saying no to this kind of bullshit. I've been threatened in ways you can't imagine. I had a nervous breakdown and had to get out.

It will only be when someone finally and utterly nails these pricks on video [and in clear hi-def sound] in the middle of committing one of these crimes that we'll be able to address and correct these wrongs. And until it finally happens to them, "patriotic" white America will keep hiding in a foxhole and pretending none of this is true.

Both loan officers said the bank had given bonuses to loan officers who referred borrowers who should have qualified for a prime loan to the subprime division.

Nice to see a supposedly reputable institution like Wells Fargo doing business like the skankiest of fly-by-night mortgage brokers. This also puts the lie to the suggestion these are the allegations of two disgruntled employees.

Obviously, people more senior than they knew what was going on, and encouraged it. Not that the whistleblowers are such angels themselves. They were party to the ripoff for 10 years before they did anything about it.

The magnitude of the fraud here is staggering. Also from the article:

For a homeowner taking out a $165,000 mortgage, a difference of three percentage points in the loan rate - a typical spread between conventional and subprime loans - adds more than $100,000 in interest payments.

So, over the course of a 30-year mortgage the victim is having about $300 stolen from them every month. If your or I held up a convenience store and stole $300 from the register we would probably get 5-10 years in prison. I hope the same happens to some people at Wells Fargo.

Also, the NYT article has pretty daming statistics, so its not like two random people making up random accusations out of thin air.

What Wells did is horrible, but being the sucker is just as bad.

Well, somebody has to ask this question since the NYT didn't (or did and withheld the information because it would taint the story), but why are Jacobson and Paschal no longer employed by Wells Fargo?

Could this possibly be a vendetta by two fired, disgruntled ex-employees against their ex-employer?

Why are there only two (ex)employees who filed affidavits? If this were standard operating procedure, why are there more?

That's why these cases are tried in court with cross-examination and witnesses, and not tried in in the press.

It's really shameful what the loan industry did to so many people - and once a home is in foreclosure, the lender paints the borrower as a "deadbeat" who is trying to "steal" from them. Shameful.

Oh yeah. Affidavits from the loan officers themselves.

I will now humbly eat crow, and take most of that back. It wasn't as if people went and got themselves into these messes thinking that the potential downfall would never happend.... they were lied to, plain and simple. Even worse, they were actually talked out of sensible decisions that they wanted to make, and into crappy ones.

On that note, check out the devil in the O!

[www.mddailyrecord.com]

[www.baltimoresun.com]

@Munchie: You must work for FOX news......let's blame the accuser. Truth be damned.

@Munchie: Unless the NAACP claims bankers were shooting black people on sight, I don't see how that would be possible.

@floraposte: There's a few answers to why a bank would pander , Flora. One reason was pure and simple short term greed to drive their value up as sub prime loans were more profitable to the bank if the loan was paid off. Another was the assumption that home prices would keep going up so if they were foreclosed on, the bank got a house that is now worth a lot more money. Basically, stupid/evil/scummy banks saw subprime lending as win-win.

And as for no-doc loans, it was an open 'secret' in the industry that the reason they never got income documentation was to allow the lenders to fudge numbers in their favor, including giving loans to people they knew would be foreclosed upon in a few years.

Isn't free market capitalism with little government regulation awesome?

@Munchie:
As a middle-aged white male, let me be the first to call you a f.... idiot. What is there to spin other than your vitriol?

Let's not even get started on California's problems.

It would be nice if a non-profit would contact the black churches and offer to do financial education seminars. Since the pastors have so much influence I'm sure a lot of people would show up to one. Might cut down on the predatory lending industry.

Maybe their stagecoach has confused them into thinking it's still 1850. Totally inexcusable.

Poor whites were targeted but the point of this suit and other complaints like it is that minority applicants were steered towards subprime loans even if they would have qualified for other loans.

The complaints have been that upper middle class and middle calls minorities applying for loans were regularly given sub prime loans while white applicants with the nearly identical job histories and economic situations were not automatically given sub prime loans but given better loans.

Basically anyone with a poor understanding about what was going on was a mark to these banks. Its a perfect scam too! Just go watch any conservative commentator and how they BLAME these people for getting involved with mortgages they couldn't pay, disregarding completely the overwhelming evidence showing these people DIDNT KNOW what was going on.

The US loves to criminalize its poor as useless drains on our nation. This is just another example of how we chew them up and ruin their lives for the upper classes benefit.

I'm conflicted. I thought we were living in post-racial America now that we have a black president. I'm not sure what to believe anymore.

Seriously, though, this is another sad example of old habits dying hard. As a Ravens fan, I'm calling for a Ray Lewis back tackle for all responsible parties.

Honestly, I worked in the mortgage industry for many a years; but don't feel tricked into thinking that this was only happening to "Black" or African American's. It was intended to get a loan done no matter what color or race they were. I think it's really wrong to continue to say mortgage lenders were targeting only this specific race.

Everyone was a target, greed is color blind.

Now, I'm just curious, why would some of their clients not want to provide income documentation? I don't understand that.