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Discrimination suit filed against lenders

March 13, 2009 12:00:00 AM PDT
The NAACP has filed class-action lawsuits against two major lenders, claiming racial discrimination in mortgages. The civil rights group says Wells Fargo and HSBC forced black homebuyers into risky subprime loans, even when they had the same qualifications as white applicants.According to the lawsuits, African Americans are three and a half times more likely than white borrowers to be put into a subprime mortgage. White borrowers are six times less likely to get a subprime rate when refinancing.

Wells Fargo and HSBC are named in the lawsuit. They join 12 other lending institutions sued in the last two years by the NAACP for identical reasons.

Los Angeles attorney Brian Kabateck is representing the NAACP in all the lawsuits.

"This lawsuit isn't about money, it's about changing practices, it's about a consent decree or an injunction the courts will supervise for a long time in the future," said Kabateck.

Wells Fargo stated: "We have never tolerated and will never tolerate discrimination in any way, shape or form, in any of our business practices, products or services. Our loan terms are based on market factors, and on individual customer and loan circumstances."

"An African American is three to five times more likely to get put into a subprime loan as their exact identical white counterpart," said Kabateck.

HSBC stated: "We do not comment on litigation. HSBC stands by its fair lending and consumer protection practices and we are confident that we are treating our customers fairly and with integrity."

Amara Weaver says she was a victim of predatory lending. At closing, she found out her rate was not low, but 11 percent. She is a member of the NAACP.

"I had already put out some additional monies in order to get the place renovated," said Weaver. "I was stuck."

According to Kabateck, the NAACP negotiated with Wells Fargo for 18 months. When it fell through they filed Friday's lawsuit. Kabateck won't name names but says at least one of the mortgage lenders named in the 12 identical lawsuits is negotiating a settlement.