DannLaw and Zimmerman Law Offices file class action lawsuit against Wells Fargo, say bank discriminated against black borrowers

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Wells claims he engaged in a “…pervasive pattern of disadvantaging blacks against whites in mortgage lending

CLEVELAND, OHIO, USA, April 6, 2022 /EINPresswire.com/ — Claiming that Wells Fargo has engaged in a “…pervasive pattern and practice of disadvantaging black Americans against white Americans with respect to their mortgage applications,” attorneys for DannLaw and Zimmerman Law Offices filed a class action lawsuit against the giant bank in the United States District Court for the Eastern District of New York on Tuesday, April 6, 2022. Oral argument in the case can be viewed here: Ifemoa Ebo vs. Wells Fargo. The official citation for the case is Ebo v. Wells Fargo Bank NA (nyed-1:2022-cv-01922)

Wells Fargo’s troubling discriminatory behavior has been documented in an extensive story published by Bloomberg in March. According to the report, only 47% of black homeowners who filed for refinance with Wells Fargo in 2020 were approved, compared to 72% of white homeowners. In comparison, other lenders had much smaller disparities in approval rates, ranging from 7% to 12%. Bloomberg also noted that “Wells Fargo approved a greater share of applications from low-income white homeowners than all black applicants except the highest incomes, who had about the same approval rate as white borrowers in the lowest income bracket”.

Wells also discriminated against black people who applied for new mortgages. A review of publicly available data collected by the CFPB reveals that the bank approved applications submitted by blacks at a 21% lower rate than those submitted by whites. The disparity in approval rates among other lenders including Chase, Quicken, United Wholesale Mortgage was around 10%.

Ms. Ebo’s case puts a face to Bloomberg’s reporting. In late 2021, she began searching and found a new home in the East Flatbush neighborhood of Brooklyn. After signing a $900,000 purchase agreement, she applied for a mortgage in Wells. At the time, her credit score was around 800, her annual salary was $178,000, and she had no significant debt.

On Nov. 1, 2021, Wells pre-approved her for an $883,698 loan. The pre-approval was due to expire on February 24, 2022. Ms Ebo then immediately began working with the bank to secure final approval for the loan. She submitted all documents requested by Wells, including W-2 forms, pay stubs and bank account statements in a timely manner. On December 29, 2021, she received a “commitment letter” informing her that the application had been approved and informing her that she only had to submit a few additional documents “in order to finalize the underwriting and funding. of the loan.

Things immediately went off the rails. In January and February, Wells again requested additional information, most of which had already been submitted. She was also asked to provide material that was, according to the lawsuit, unnecessary, unduly burdensome and irrelevant. For example, she was asked to explain why she made a monthly credit card payment of $290 to her own account and for a bank statement for a bank account that did not exist.

As Wells’ unnecessary and redundant requests for information continued in late February and March, Ms Ebo told the bank she feared her pre-approval would expire before she received her loan, even if she was highly qualified and provided all requested documents.

His concern was justified. On March 22, 2022, the seller of the property canceled the purchase agreement with Ms Ebo because Wells had not approved her financing and it was unclear if they would ever do so. She informed Wells of the seller’s decision the same day and therefore did not and never will receive the loan.

This is not the first time the lender has been accused of discriminatory behavior. In 2012, the bank entered into a consent decree with the US Department of Justice to resolve allegations that it unfairly directed black and Hispanic borrowers to subprime mortgages and charged higher fees and interest rates. higher than whites. At the time, Wells paid thousands of borrowers $184 million and agreed to adopt new compliance policies.

“Wells’ treatment of Ms. Ebo is unconscionable, illegal, but not surprising in light of the company’s history, Bloomberg’s reporting, and conversations we’ve had with others subjected to the outrageous practices of the bank,” said DannLaw’s Javier Merino. “Clearly, Wells was not deterred by laws that prohibit discrimination. Perhaps being held accountable in court will motivate them to change their ways and treat all applicants regardless of their race, equally and fairly in the future.

The lawsuit seeks actual damages, statutory and punitive damages, attorneys’ fees and costs. For more information, please contact Marc Dann at 330-651-3131.

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