Judge could rule on ‘ghetto loans’ Monday

U.S. District Judge Benson Legg has said he could rule Monday on whether or not a discriminatory lending case against Wells Fargo Co. would continue.

The City of Baltimore has filed suit against the bank, claiming the lender shunted a high number of quality mortgage loan applicants who were black into high-risk subprime loans. As many loans fell into foreclosure, the city was left with a lower tax base, higher crime and an increased need for sanitation services, The Baltimore Sun reported Monday.

Attorney Barbara Samuels at the American Civil Liberties Union called the city’s approach to the case innovative.

The city filing rather than the individual homeowners keeps the focus on pattern and business practices, as opposed to getting lost in the weeds of individual transactions, she said.

If Legg allows the case to continue Monday, the city will be able to subpoena bank employees and have access to bank records, the newspaper said.

Wells Fargo has said the case absolutely lacks merit.

In depositions, however, two bank employees have said racial slurs were common at the bank, where subprime loans were often called ghetto loans.