City sues Wells Fargo a third time

After two previous dismissals, the city has made a third attempt to sue Wells Fargo Bank, accusing the company of causing increased foreclosures in Baltimore through racist, predatory lending.

The latest complaint, filed Thursday in U.S. District Court, contains 14 new paragraphs that purport to address concerns that led Judge J. Frederick Motz to dismiss the case twice before — namely a lack of evidence that the mortgage lender was responsible for housing vacancies and millions of dollars in associated damages.

In the second dismissal, Motz asked the city to show why the properties would not "have been vacant in any event." The new filing attempts to explain this through a general description of the ways in which lending to those who can't afford the loan leads to foreclosure.

Baltimore's lawsuit was said to be the first of its kind when it was filed in January 2008. It alleged that Wells Fargo targeted minority borrowers for bad loans in an illegal practice known as "reverse redlining." That, in turn, led to defaults and a disproportionately high rate of foreclosures and vacancies in black or Latino neighborhoods, the city said.

Wells Fargo has repeatedly denied the allegations. In a statement issued Friday, the company said it would "vigorously fight" the lawsuit and expressed disappointment that "the City of Baltimore has decided to spend much-needed taxpayer resources to file another lawsuit. … The socioeconomic challenges facing Baltimore cannot be attributed to the small number of loans that Wells Fargo has foreclosed in the city, and the city itself has acknowledged that long-standing crime, unemployment and socioeconomic issues have contributed to the city's problems."

tricia.bishop@baltsun.com

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