An expose of bad businesses and their unethical practices

A new type of lawsuit has emerged as the mortgage and foreclosure crisis continues to gain steam. The City of Baltimore has sued Wells Fargo, a major player in the mortgage market, alleging that the lender engaged in predatory and discriminatory loan practices. Should the City win the lawsuit, they estimate that they could recover tens of millions of dollars for homeowners facing foreclosure.

Individual homeowners could get as much as $5,000 to help them avoid foreclosure. At issue are loans made between 2004 and 2007 in the city, and in which blacks were discriminated against. Discrimination took the form of higher rates, higher fees, higher volumes of foreclosures, including interest rates three percent higher for blacks than for whites.

The Baltimore lawsuit is the first attempt by a municipality to recoup losses resulting from foreclosures, according to city officials. Mayor Sheila Dixon estimates the city could win “tens of millions” of dollars that could be funneled into counseling, refinance programs and other outreach efforts.