ROCKVILLE, MD — Montgomery and Prince George’s counties filed two federal lawsuits against Wells Fargo and Bank of America Tuesday for allegedly violating the federal Fair Housing Act by various predatory lending practices. The counties claim the banks and their acquired entities knowingly sold African American and Latino borrowers non-prime mortgage loans at a higher cost, and that many of the loans were doomed to fail.
The two counties are seeking damages and injunctive relief against the banks and its entities — including Merrill Lynch, Wachovia Corporation, and Countrywide Financial Corporation, according to a statement.
Montgomery County Executive Ike Leggett said the banks are allegedly responsible for doling out “tens of thousands of potentially predatory and discriminatory mortgage loans” to borrowers since 2000. Both counties accuse the banks of either originating the loans directly or helping other firms — such as AmeriQuest Mortgage Company and Accredited Home Lenders — to originate them, according to a statement.
More specifically, Leggett said Merrill Lynch and Countrywide Financial Corporation are “responsible for at least 97,500 potentially predatory and discriminatory mortgage loans originated” in both counties. Wells Fargo, Leggett added, is “responsible for more than 56,000 loans.”
“The discriminatory equity stripping housing practices engaged in by the banks and their affiliates greatly damaged our communities,” said Leggett. “Bank of America’s wrongful mortgage practices continue to this day. We cannot allow this to continue to harm the finances of the county and shift the costs that the defendants are responsible for onto our taxpayers.”
In a statement, Leggett said banks have discriminatorily foreclosed on the homes of minority borrowers.
“The lending agencies’ discriminatory housing practices have resulted in increased numbers of home vacancies and foreclosures that have harmed both counties through increased out-of-pocket costs for county services incurred for processing foreclosures, and the costs relating to the identification, maintenance, repair, monitoring and demolition of foreclosed, abandoned and/or vacant properties,” Leggett said in a statement. “In addition, the counties have been damaged from the erosion of the tax base, the loss of property tax and other revenue, and from the resources they have had to shift to address urban blight and the racially segregative effect on their respective communities and neighborhoods.”
A spokesperson from Bank of America said “the claims are without merit.”
“The claims are without merit and we will vigorously defend our interest in this matter,” the spokesperson said. “There is no basis for the complaint and Bank of America’s record demonstrates we have a firm commitment and strong track record for fair lending.”
Patch has reached out to Wells Fargo but did not hear back in time of publication.
This story may be updated.
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