oakland

Oakland City Attorney

Oakland City Attorney

Oakland City Attorney

Oakland City Attorney

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city and urban

Oakland City Attorney Barbara J. Parker Applauds the April 25, 2024 Motion to Certify a Class Action Lawsuit Against Wells Fargo for Mortgage and Other Lending Discrimination Against Blacks and Other Minorities

In Re Wells Fargo Mortgage Discrimination Litigation, Case No. 3:22-CV-00990-JD

In 2015 Oakland City Attorney Barbara J. Parker filed a lawsuit against Wells Fargo for racially discriminatory mortgage-lending practices against Black and Latinx borrowers in violation of the federal Housing Act and California’s Fair Employment and Housing Act. In 2020 the U.S. Court of Appeals for Ninth Circuit  (“Ninth Circuit”) upheld City of Oakland’s right to sue Wells Fargo under the federal Fair Housing Act to recover for its racially discriminatory lending practices that contributed to widespread foreclosures. Unfortunately, in 2021 after rehearing en banc, the Ninth Circuit ruled that all of Oakland’s claims should be dismissed; the Ninth Circuit  found that the City’s damages claims (higher defaults rates, which  triggered higher foreclosure rates that drove down the assessed value of properties and ultimately resulted in lost property tax revenue and increased municipal expenditures) were too attenuated to be recoverable under the Fair Housing Act.

A recent lawsuit, seeking redress for discrimination against Black and other minority applicants for loans,  In Re Wells Fargo Mortgage Discrimination Litigation, Case No. 3:22-CV-00990-JD, is pending in San Francisco before the United States Federal District Court for the Northern District of California.  Plaintiffs  have filed a motion seeking  certification of a class of all minority applicants who were impacted by Wells Fargo’s racially discriminatory practices. The case alleges “that Black and other minority applicants had their applications intentionally and disproportionately denied, faced unjustified delays in the processing of their applications, and were given less favorable terms, which resulted in Wells Fargo systematically engaging in a new form of redlining that harmed Plaintiffs based on their race and ethnicity,” according to Dennis S. Ellis of Ellis George LLP, who was appointed by Judge Donato to co-lead the suit against Wells Fargo.

An article in Bloomberg on March 10, 2022 reported that “Wells Fargo Denied Half Its Black Applicants in Refinancing Boom.”  As shown by the Bloomberg article, relying on data Wells Fargo disclosed as required by the Home Mortgage Disclosure Act (“HMDA”), the lawsuit contends that at a time when millions of white Americans were able to take advantage of historically low interest rates for home loans, Wells Fargo approved just 47% of refinance applications by Black homeowners, 53% for Hispanic and/or Latino refinance applicants, and 67% of Asian-American refinance applicants, compared with 71%, 79%, and 85% respectively for these same ethnic groups across all other lenders.

After two years of intensive evidence gathering during the pre-trial “discovery” phase, Plaintiffs have confirmed  that Wells Fargo discriminated against minorities in mortgage applications. Based on their own internal communications, revealed in discovery, Wells Fargo was forced to admit that for 2020 refinance applications it approved just 49.1% of applications from Black applicants compared to 69.4% of white applicants. The numbers for 2021 and 2022, during a period of record low interest rates, were just as bad: In 2021 Wells Fargo approved 59.3% of refinance applications from Black applicants compared to 77.9% of those from white applicants; and in 2022 Wells Fargo approved 45.7% of applications from Black applicants compared to 64.2% from white applicants.

Oakland City Attorney Barbara J. Parker recently championed the pending lawsuit: “The City of Oakland has long recognized Wells Fargo as a bad actor when it comes to discriminatory practices that harm prospective Black and Latinx mortgage borrowers. I applaud the filing of a motion for class certification in the ongoing mortgage discrimination litigation pending in the Northern District of California. Our office has reviewed the motion and the disturbing contentions made therein, which appear to be supported by evidence discovered in the case. Although the City of Oakland filed suit against Wells Fargo on these same issues in 2015, our case  ultimately was dismissed. I am very pleased to see the legal battle to secure fair banking opportunities for every Californian – including Oakland residents – continue.”

city and urban

Oakland City Attorney Barbara J. Parker Applauds the April 25, 2024 Motion to Certify a Class Action Lawsuit Against Wells Fargo for Mortgage and Other Lending Discrimination Against Blacks and Other Minorities