Wells Fargo moves into a city it helped devastate

This weekend you may notice former Wachovia branches around Baltimore getting a makeover, swapping out their old logos for brand new Wells Fargo signs. While Wells Fargo has been busy promoting the new and improved services customers will receive, people in my east side neighborhood can't forget all the old services the bank brought to Baltimore during the height of the housing bubble.

From 2005 to 2009, Wells Fargo was Baltimore's biggest mortgage lender, and it issued more high-cost subprime loans than any other bank. Even worse, Wells Fargo seems to have intentionally targeted African-American borrowers for the majority of these disastrous loans. The bank made subprime loans to 65 percent of its African-American borrowers, while issuing subprime mortgages to just 15 percent of white customers.


These lending practices have prompted a discrimination suit against Wells Fargo by the city of Baltimore, and two ex-Wells Fargo employees have testified that within the company, its subprime mortgages were referred to as "ghetto loans."

I wonder if Wells Fargo executives ever considered the effects of their "ghetto loans" on neighborhoods like mine. Their reckless loans forced borrowers into bankruptcy and left thousands of foreclosed and abandoned homes in their wake. I live next to four vacant homes, and they are magnets for rodents and crime.


Wells Fargo's slogan is "Together we'll go far," but I'm afraid to go much farther than my own front door, thanks to all the abandoned properties on my block. I have three young children living at home, but many of my neighbors don't even know I have kids because I'm afraid to let them go out to play. Police chases are a regular occurrence on my street, often right through my front yard.

Baltimore has long had a problem with vacant properties, but the predatory lending practices of Wells Fargo and other companies made the crisis even worse in our city's majority-black neighborhoods.

According to legal documents from the city's discrimination suit, Wells Fargo's internal pricing sheets required that borrowers in predominantly African-American neighborhoods pay higher interest rates than borrowers in predominantly white neighborhoods with exactly the same credit rating. That led to thousands of dollars in extra interest payments for black customers, so it's no surprise that Wells Fargo's foreclosure rate in Baltimore's majority-black neighborhoods has been four times higher than in majority-white neighborhoods.

While this history is appalling, there's hope for the future. Recently, Springfield, Mass., passed two ordinances to help limit foreclosures and clean up abandoned properties. The first ordinance requires that banks, with the aid of a city-approved mediator, engage in good-faith negotiations with borrowers before foreclosing on their homes. The second requires banks to pay a $10,000 cash bond to the city if they foreclose on a property. That would be a serious deterrent to banks like Wells Fargo that have foisted unaffordable loans on unsuspecting customers. It also makes economic sense for the city. The annual cost for police services in Baltimore can increase by more than $1,000 for every vacant property.

But new ordinances aren't enough to fix this problem. Wells Fargo also needs to do more. As a partner in the federal government's Home Affordable Modification Program (HAMP), Wells Fargo could be working aggressively with distressed borrowers to keep them out of foreclosure. Instead, Wells Fargo has been so lackluster in helping homeowners that the Treasury Department recently penalized the bank for its subpar work on HAMP. It's time for Wells Fargo to step up and provide immediate assistance to families facing foreclosure.

For properties that are already abandoned, Wells Fargo should use some of the $12.4 billion in profit it earned last year to rehab that housing stock, making a concerted effort to employ Baltimore residents from neighborhoods like mine who desperately want and need work.

I'd like to believe that Wells Fargo and Baltimore can "go far together." But the bank's executives need to show they're ready to take the first step.

Valerie Brinkley has lived in Baltimore's Middle East neighborhood for nine years. She's an activist with Good Jobs Better Baltimore, a coalition of community organizations, unions and religious groups. Her email is