Wells Fargo Bank Seeking Extension From Federal Court Amid Mortgage Discrimination Lawsuit
Banking giant Wells Fargo filed a motion with Federal Judge James Donato last week in the Northern District of California seeking a three-week extension to respond to the plaintiffs’ three expert evidence reports over allegations the bank racially discriminated against minority borrowers.
The bank shared in its motion that it needs more time to "understand the bases for Plaintiffs' expert opinions," and that it would “suffer substantial harm and be materially prejudiced” if the request is not granted. The claims made in the lawsuit could have wide-sweeping implications, impacting as many as 750,000 potential class members.
The lawsuit surfaced after a detailed Bloomberg report published on March 10, 2022, titled “Wells Fargo Denied More than Half Its Black Applicants in Refinancing Boom." The report utilized data Wells Fargo disclosed as required by the Home Mortgage Disclosure Act ("HMDA") and paints a concerning picture that shows white applicants were able to take advantage of historically low interest rates when taking out a home loan. However, minorities were not afforded the same approval by the bank.
The data shows that 47% of refinance applications by Black homeowners, 53% of Hispanic refinance applicants, and 67% of Asian-American refinance applicants were approved for loans as compared to the 71%, 79%, and 85% respective ethnic group application approvals that were reflected across all other lenders.
During the four-year period the lawsuit covers, Ellis and his team say the bank denied over 73,000 Black applicants.
The lawsuit argued 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."
Judge Donato appointed Dennis S. Ellis of Ellis George LLP to lead the lawsuit against the bank. Ellis has since commented on the bank’s motion for an extension saying, “Wells Fargo had ample opportunity to address the effect of its lending practices and the harm it was causing as a company to hundreds of thousands of minorities, but chose to do nothing to alter its policies that were denying loans to those citizens at record disparities as opposed to White Americans.”
Ellis says that the bank should not be given the three-week extension and that “the fact that Wells Fargo years after instituting the discriminatory policies that have caused so much damage to its minority mortgage loan applicants still has no answer for its actions is appalling."
Prominent civil rights attorney Ben Crump is serving as co-counsel on the case and has also shared, "Systematic racial discrimination in home ownership and financing is one of the most significant causes for the stark differences in generational wealth between Black Americans and others."
Crump adds, “This case is about justice, not only for the named plaintiffs in this case but for every Black applicant or homeowner who was turned away by Wells Fargo because of the color of their skin. There should be no further delays in our attempt to hold Wells Fargo accountable for its wrongdoing, and we will thus oppose the request."
