June 2, 2009

Baltimore's "reverse redlining" lawsuit against Well Fargo

From an article in the Maryland Daily Record:
The city of Baltimore has beefed up its groundbreaking racial discrimination lawsuit against Wells Fargo with sometimes shocking testimony from a pair of the megabank’s former subprime-loan officers.

The two whistleblowers claim their co-workers targeted black ZIP codes and churches, used software to “translate” marketing materials into African-American vernacular, and referred to subprime loans in minority communities as “ghetto loans” and to borrowers as “mud people.”

Their declarations were attached to an amended complaint filed Monday in U.S. District Court in Baltimore.

The loan officers, who worked for Wells Fargo in the Baltimore-Washington area from the late 1990s until 2007, also alleged bank employees deceptively steered prime borrowers into subprime loans for their own financial benefit and joked that they were “riding the stagecoach to Hell.”

The city also filed declarations from four city residents who live near Wells Fargo’s foreclosed properties. They complained of squatters, rats and burst pipes, all of which have required attention from some city department.

It cites 10 studies, including one specific to Baltimore, which studied reverse-redlining in black neighborhoods; and updated the foreclosure data to include the first part of 2009.

The new material “shows the City has been injured…and that Wells Fargo’s policies and practices employ subjective and discretionary underwriting practices that have disparately impacted African Americans,” according to the city’s motion for reconsideration. ...

The city has alleged Wells Fargo targeted minority neighborhoods and borrowers for high-rate subprime loans — a practice known as reverse red-lining, which is illegal under the federal Fair Housing Act, according to the city’s legal team. The city wants tens of millions of dollars to compensate for the collateral costs of Wells Fargo’s foreclosures, such as increased police and fire department expenditures.

The bank has denied any such strategy and said its loan pricing is simply based on credit risk. It has also challenged the city’s standing to bring suit and pointed to the city’s own role in the foreclosure crisis.

“We have worked extremely hard to make homeownership possible for more African-American borrowers and all customer segments, and we have done so fairly and responsibly,” Wells Fargo spokesman Kevin Waetke wrote in an e-mailed statement late Monday. “We absolutely do not tolerate team members treating our customers disrespectfully or unfairly, or who violate our ethics and lending policies. Race is never a factor in the pricing or products we offer.”

The government spent decades attacking redlining as evil and irrational, so in this decade we got "reverse redlining" -- a.k.a., Diversity Outreach. Also, no doubt the bank was under pressure to hire more diverse workers, and to work more with more diverse mortgage brokers. All this is conducive to boiler room high pressure tactics that stay under the radar screen of regulators and the media until the bubble bursts.

I'm not particularly impressed by the implicit argument that the higher default rates on subprime loans taken out by blacks and Hispanics are due to them being steered into subprime loans instead of the prime loans they deserved. First, lots of them defaulted while still on the two year introductory teaser rates. Second, all that just suggests the risk premium should have been even higher, so high that many of these loans wouldn't have been made. But of course that would just lead to charges of "redlining." So, Housing Bubbles and Busts in heavily minority areas are inevitable under the current conventional wisdom about race.

My published articles are archived at iSteve.com -- Steve Sailer

46 comments:

eh said...

Passing by/thru some parts of, or the outskirts of, Baltimore not long ago on a train from NYC to Wash DC I can tell you it looked like something out of the third world. And yet they were probably making mortgage loans to a significant subset of those people. Significant enough I guess.

headache said...

2 things:
bank employees ... joked that they were “riding the stagecoach to Hell.”
LOL, nice to see somebody knew what was going on.


But of course that would just lead to charges of "redlining." So, Housing Bubbles and Busts in heavily minority areas are inevitable under the current conventional wisdom about race.
The "current conventional wisdom about race" is maintained because the alternative would see millions of blacks and Latinos slide back down into poverty. Then we have the same circus all over again with Church and Jewish groups and the usual suspects pressurizing the government via the media and through “million man marches” to do something about the "injustices" and leveraging that dissatisfaction to influence the political system.
Basically AA is a payoff to prevent mass action. A bribe if you will.

Juan Jamal Arafat said...

right out of Jesse Jackson's playbook, literally:
http://www.amazon.com/Its-About-Money-Achieve-Financial/dp/081293296X

Kevin I. Slaughter said...

Living in Baltimore for 6 years I can't say much about what it looked like before I moved here, but I can tell you that when I arrived, large swaths of the city consisted of boarded up rowhouses.

One website states: "By 1960, Baltimore was threatened by suburban sprawl and the construction of highways through the inner harbor and the historic downtown neighborhoods. A preservation-minded citizenry organized to save historic neighborhoods such as Fells Point and Federal Hill. Later, in 1975, “homsteaders” saved the Otterbein historic neighborhood by buying condemned houses for $1 and preserving them. This initiative caught on in other historic neighborhoods; Baltimoreans reinvented their city as a collection of restored and rebuilt neighborhoods."

When driving around the city you'll find pockets of white areas that are kept up, surrounded by decrepit and condemned black housing. But most of the tax-payers flee the city when the 5 o'clock whistle blows, and now me with them.

The racism here is much more palpable than anything I experienced growing up in the South (even though Balt. is technically below the Mason-Dixon).

Anonymous said...

“riding the stagecoach to Hell.”that's the kind of truthful joke that will become 'illegal' increasingly, whites, productive people will be sued (i can bet this will be part of the evidence) for expressing things like this.

The first poster, "eh" said that parts of the baltimore are looking like the 3rd world. This is true for the entire US - it is slowly turning that way.

Our elite don't care because, well, look at how the elite live in those parts of the world - like kings!

this can no longer be written off as 'kooky' - we are being intentionally being destroyed.

OneSTDV said...

"Basically AA is a payoff to prevent mass action. A bribe if you will."

But are our "bribes" ever going to work? It seems like a daunting task when the first lady can't stop whining about all "those people" who kept her down, ya know keeping her down by giving her Princeton and Harvard Law degrees.

dirtpipe said...

Did you post this just so you could say that those people are "mud people", albeit indirectly?

Thrasymachus said...

In the Soviet Union, but particularly under Stalin, you could follow the instructions of the party and state faithfully, and then when those policies failed, be branded as a secret saboture in a show trial and be sent to the camps.

I don't know if I'm the only person who sees left-wing politics-from the 30's onward- as being fundamentally Stalinist, but I see examples of this every day. This is a pretty extreme one though and reaches a new low.

The accusations of the use of he term "mud people" will of course never be proved but it's part of the process to accuse the victim of something really vile to frighten, humiliate, and degrade him and encourage him to go into self-criticism.

dearieme said...

Are there any large American businesses which avoid all this stuff by confining trade to states with predominantly white, or white & asian, populations only?

poolside said...

Wells Fargo has clearly bought into the diversity racket ... the location near me has promotional posters covering its walls featuring a wide range of happy "customers" -- not one of them white.

The same goes for their web advertising. They show young families, old couples, entrepreneurs, college students, new homeowners, etc. ... and none of them are white.

Don't white people need banks too?

J said...

Things are changing so fast that I am feeling lost. The bank used software to “translate” marketing materials into African-American vernacular. Is it PC good or is it PC bad?

.. and referred to subprime loans in minority communities as “ghetto loans”. Is the word ghetto offensive? Was it offensive when used by the loan officers? What is their problem?

All this is confusing and ridiculous. Americans - White, Black, Jewish, NAMs, Latinos, Neanderthals, Klingons, Goth, Borg, dwarves and giantesses, you name it - are becoming mud people. Mud, mud, mud. Sue me.

Anonymous said...

"reverse redlining" -- a.k.a., Diversity Outreach
----------


Should read: Diversity OVERreach.

Anonymous said...

headache,

I agree with you that AA is at this point a "bribe."

A good old - conservative - friend of mine made the argument that AA was necessary to prevent riots.

I solicited and received assurances that he was not joking.

The idea that AA is a bribe, and a necessary one, is actually conciously held by probably more people than we realize.

Anonymous said...

"Don't white people need banks too?"

No silly, they ARE the bank. Get it?

Anonymous said...

> Don't white people need banks too?

Yes, solvent ones.

Steve

Anonymous said...

"mud people" strikes me as nonsense.

PRCalDude said...

Wells Fargo has clearly bought into the diversity racket ...And now they're reaping the fruits in the form of this lawsuit and other things.

Don't white people need banks too?We prefer dreary old credit unions. You don't get the glitzy self-congratulatory commercials on TV (WaMu comes to mind), but you do get some sort of financial sanity.

Anonymous said...

"Are there any large American businesses which avoid all this stuff by confining trade to states with predominantly white, or white & asian, populations only?"

RBC had only 0.5% crappy mortgages.

Oh wait that's Canadian.

LemmusLemmus said...

"The two whistleblowers (...) used software to “translate” marketing materials into African-American vernacular"

That sounds like fun reads. Does anyone know whether these materials are online?

Anonymous said...

"A good old - conservative - friend of mine made the argument that AA was necessary to prevent riots.

I solicited and received assurances that he was not joking.

The idea that AA is a bribe, and a necessary one, is actually conciously held by probably more people than we realize."

Thank God it is working. We never have any riots...

Lucius Vorenus said...

Yeah, from what I've read, Derbyshire seems to be of the bribe -vs- riots in the streets school of thought.

Anonymous said...

"Ghetto loans" I'll accept but not "mud people". No way that happened. In this day and age of diversity training, there is no way in hell that employees in a big company like Wells Fargo would dare use that term. The employees would know that somebody somewhere who overheard them would turn them in for "brownie points", assuming we are still allowed to use THAT phrase.

Anonymous said...

Sounds like these Wells Fargo loan officers were caught up in a nightmare frenzy of hate.

John Anello said...

Another wonderfully successful policy of the liberal social engineers.

PA said...

In the Soviet Union, but particularly under Stalin, you could follow the instructions of the party and state faithfully, and then when those policies failed, be branded as a secret saboture in a show trial and be sent to the camps.

I don't know if I'm the only person who sees left-wing politics-from the 30's onward- as being fundamentally Stalinist, but I see examples of this every day. This is a pretty extreme one though and reaches a new low.

The accusations of the use of he term "mud people" will of course never be proved but it's part of the process to accuse the victim of something really vile to frighten, humiliate, and degrade him and encourage him to go into self-criticism.
.
.
If this blog had a "comment of the month" feature, I'd nominate this one.

Darwin's Sh*tlist said...

...used software to “translate” marketing materials into African-American vernacular...This part doesn't ring true. I've worked in the financial industry (though not in mortgage lending) and am familiar with how marketing materials are vetted at large firms. They have to go through a number of reviews - lawyers, compliance staff, etc - before they're ok'd for distribution. If someone were to get caught altering them in the manner suggested, it would be a career-ender.

And, yeah, "mud people" strikes me as odd as well.

Anonymous said...

Alternative, more accurate headline:

"Baltimore admits its residents are so dumb that they, collectively, signed on to bad loans that bankrupted their already-destitute community"

There's a reason The Wire takes place in Baltimore. And it isn't because Baltimore is glamorous.

Victoria said...

The accusations of the use of he term "mud people" will of course never be proved but it's part of the process to accuse the victim of something really vile to frighten, humiliate, and degrade him and encourage him to go into self-criticism. ===

I think you have a good point here. The term "mud people" does sound rather staged. Even among professed white nationalists, this is an expression used only by a few. It doesn't ring true and does smell of a set-up.

Anonymous said...

Thanks to all of you. Whenever I feel like I am losing my mind (I live in Park Slope Brooklyn), I come here and read what you write, and it is sane, and I realize I am not alone. This, Half Sigma, VDare, Michael Savage -- small outposts that actually speak the truth. It is so liberating to read. Jesus said, famously, "You shall know the truth, and the truth shall make you free." The truth spoken here is like a shampoo for my brain. I feel myself relaxing as I read it. I am surrounded by liberals who lie to themselves all the time, and I just have to keep my mouth shut. Thanks again.

Anonymous said...

"I am surrounded by liberals who lie to themselves all the time, and I just have to keep my mouth shut."



Ah, yes, the tyranny of the masses.

Anonymous said...

Hey Park Slope dude...
It was rather funny, I thought all those glassy eyed obama liberals revolting in horror when a publically funded madras (arabic language school) opened in the same building as their carefully racial boundry drawn public school they send their kids to.

Anonymous said...

Does anyone remember the movie airplane where the stewardess needed someone to translate for the black guy?

I knew a german who once told me that he watched a swiss television program (spoken in lower german) that needed to use subtitles so the germans could understand it. He still got quite a laugh 15 years on.

Marc B said...

"Wells Fargo has clearly bought into the diversity racket ... the location near me has promotional posters covering its walls featuring a wide range of happy "customers" -- not one of them white."

It's been a trend in advertising for years. Madison Ave started depicting inept and emasculated white guys as the norm in the late 1980's. I'd be willing to bet there was a direct correlation between this trend and the increased hiring of multicultural/ PC creative types that replaced the hard boiled slicksters a la MAD MEN. The new trend is to appeal to all of the protected groups knowing white males will mindlessly consume their products regardless of the companies insulting or alienating marketing campaigns.

I notice in Target stores that if white males are depicted at all on their displays, they are usually of Mediterranean extraction or effeminate twinks.

Svigor said...

The term "mud people" does sound rather staged. Even among professed white nationalists, this is an expression used only by a few.

In my experience it's a hardcore WN term, i.e., they're the only ones I've ever heard or read using it.

Anonymous said...

"I think you have a good point here. The term "mud people" does sound rather staged. Even among professed white nationalists, this is an expression used only by a few. It doesn't ring true and does smell of a set-up."

The only time I have ever seen the term "mud people" used - and I've never heard it used - was back after the Oklahoma City bombing and I think it was a quote from "The Turner Diaries" which Timothy McVeigh was supposed to have read and sold at various events.

Believe me, this is totally a bogus charge. Nobody in a large company like Wells Fargo is going to say something like that. "Ghetto loans" maybe, since ghetto can be used to describe any kind of clustering of like people and can be explained away.

"Mud people" could get you fired in a heartbeat. DID-NOT-HAPPEN.

ben tillman said...

Alternative, more accurate headline:

"Baltimore admits its residents are so dumb that they, collectively, signed on to bad loans that bankrupted their already-destitute community"


The Griffe du Lion finds an average black IQ of 76 and white IQ of 86 among Baltimore public-school students in THE EFFECT OF URBAN FLIGHT ON IQ DISTRIBUTION:

http://www.lagriffedulion.f2s.com/city.htm

Anonymous said...

"Does anyone remember the movie airplane where the stewardess needed someone to translate for the black guy?"

Yeah, it was Mrs. Cleaver. She spoke Jive...

Victoria said...

Re the expression "mud people"--
In my experience it's a hardcore WN term, i.e., they're the only ones I've ever heard or read using it. ===

Yes, I think the typical white, meaning someone who would work for a bank in the first place, is unfamiliar with this term. That's why this story sounds awfully fishy.

Anonymous said...

I'm here in Illinois - and Wells Fargo loan originator gave us a phony prime loan and listed us both as Hispanic - when I told him we were white and not to list us as Hispanic on the app, he said it would waste time to redo the whole app to change it, that it didn't matter, and that anyway our last name sounds Hispanic so we MUST have Hispanic heritage somewhere down the line...we didn't challenge the last part and the loan went thru, turned out to be predatory, Wells Fargo is a thief and a liar and needs to go under. They dirtied a good bank name with thier greed and have destroyed millions of lives and caused the loss of tens of thousands of jobs all around with thier bull.

none of the above said...

AA is mostly a bribe to the elite. AA for policemen and firemen is less so (though both of those are positions with some built in respect and power), but easier admissions to colleges and grad/professional programs, and set-asides in federal contracting, those are bribes to co-opt the smart and successful among blacks.

My cynical suspicion is that it is politically easier to spend $X on AA programs that mostly benefit smart and successful blacks, than to spend $X on programs that might help the majority of blacks (say, giving every black kid in Baltimore a voucher for the dollar amount spent per student on public schooling in 2006).

none of the above said...

ben tillman:

Wait, you mean people with an average IQ of 76 don't do well understanding complex legal documents describing a complex financial agreement? And making plans based on working out various possible courses of action that would follow from stuff that might happen in the future, such as losing their job, having the prime rate rise suddenly, or getting a divorce?

Who could possibly have forseen such an outcome?

Anonymous said...

"mud people" strikes me as nonsense.

I agree with everyone echoing this statement. I doubt that even 1% of all white people are aware of this term.

Personally, I've never heard or seen it used, except to villify certain groups of people as "racist" for supposedly using it.

It reminds me of the "Museum of Tolerance" episode of South Park, where they expose the kids to every imaginable stereotype and racial slur to make them "aware".

Here's a great story I saw on AmRen:

"The newsletter, which Secretary Carolann Wicks distributed two weeks ago to most of the agency’s 2,600 workers, covered “workplace faux pas” involving homosexual, black, Asian, white, Hispanic and elderly workers.

The section titled “The N word,” for example, actually spells out the word, then says, “It is never, ever acceptable to use this word in any context.”

The newsletter also says it’s wrong to ask a black co-worker, “Should we order fried chicken or watermelon for you?”

The section on Hispanic co-workers lists several ethnic slurs and says workers should not ask, “Can you help me out with my landscaping?” It tells workers to avoid specific slang terms for homosexuals and not tell older co-workers, “You know Wal-Mart is hiring.”"

http://www.amren.com/mtnews/archives/2009/05/deldots_diversi.php

Anonymous said...

"when I told him we were white and not to list us as Hispanic on the app, he said it would waste time to redo the whole app to change it, that it didn't matter, and that anyway our last name sounds Hispanic so we MUST have Hispanic heritage somewhere down the line...we didn't challenge the last part and the loan went thru, turned out to be predatory"

So is that reverse-reverse-redlining?

Darwin's Sh*tlist said...

"...the loan went thru, turned out to be predatory..."

"Turned out to be"
? In what way did the loan end up operating differently from the note you signed with WF?

Big Bill said...

So why is ACORN dogpiling on the bankers? ACORN was in this scam neck-deep, right alongside Wells Fargo and all the other lenders. They were the key enabler that set up the chumps for crap loans.

At this link (http://activerain.com/blogsview/159553/acorn-loan-escape-from-the-mortgage-nuthouse-) you can read about the "ACORN loans" offered in conjunction with Wells Fargo, BankAmerica and others. Google for "ACORN loans" for much more information.

In short, ACORN arranged to give moron home-buyers a one-day training class in owning a home, mortgages and the like.

ACORN would then give the attendees a "certificate of attendance" that the buyers would show to the company selling crap loans and were deemed fully-educated about the dangers of crap loans.

ACORN arranged these "classes" and certifications all across the nation, working in conjunction with mortgage lenders everywhere in order to provide cover for crap loans.

Yet now ACORN is complaining that the same banks were cheating their (ACORN-certified) borrowers? Like ACORN wasn't out pimpin' loans with the worstof them?

Why do I have the sneaking feeling that ACORN got a cut of the proceeds for every chump NAM they "teed up" for a crap mortgage.

Dave Lincoln said...

"...we didn't challenge the last part and the loan went thru, turned out to be predatory, Wells Fargo is a thief and a liar and needs to go under. They dirtied a good bank name with thier greed and have destroyed millions of lives and caused the loss of tens of thousands of jobs all around with thier bull."

It sounds like you don't have enough self-discipline, Anonymous, much less spelling skills. I understand that you figure there was no reason to correct the guy after you tried once - I'm not knocking that part of your story. WTF makes you think that that you have to rely on the bank to decide for you whether you were able to handle that loan?

Yes, the bank does their part supposedly to make sure you meet their standards, and obviously the guy wanted to cheat on that (due to the fact that the bank was going to get rid of your loan soon after the deal). However, you have a responsibility to your family! You apparently thought it was up to the bank to decide whether you personally would be able to handle this big loan. That is stupid and irresponsible.

You're blaming this on the bank for being "predatory"?? You're the one responsible. Why'd you apply for the loan to begin with? Don't blame the bank for your own lack of financial responsibility.

Stay in Illinois, buddy, and do your damage there. It's (at least the North part) a left-wing dump anyway.