Wells Fargo Bank, the largest U.S. mortgage lender, agreed to pay $125 million to settle U.S. allegations that it discriminated against minority borrowers in making residential loans, Bloomberg News reported Thursday.
During the period 2004 to 2007, the bank made more expensive nonprime loans to creditworthy Hispanics and African-Americans, the government said in documents filed today in federal court in Washington, according to Bloomberg News. Moreover, through 2009, the bank allowed “discretionary charges” by mortgage brokers that resulted in minority borrowers paying higher fees, costs and interest than similar white borrowers, the U.S. said.
“Wells Fargo’s internal documents reveal that senior officials were aware of the numerous tactics that subprime originators employed to keep loans in the subprime division,” when they could have qualified for prime loans, the Justice Department alleged in a complaint filed with the settlement.
Not surprisingly, Wells Fargo denies the allegations that it followed an illegal pattern of lending discrimination and had agreed to settle “solely” to avoid litigation.
