According to a lawsuit filed by the City of Philadelphia, the San Francisco based bank engaged in predatory mortgage lending practices, specifically targeting minorities. Philadelphia area contract attorney Karl Heideck alleges that Wells Fargo intentionally and unwarrantedly forced riskier loans with higher rates upon minority borrowers, while whites with similar financial backgrounds and credit histories would have qualified for lower rates.According to Heideck, the City examined Wells Fargo loans over a ten year span. It was discovered that throughout this time period, there was a significant discrepancy between the rate charged to Hispanic and African-American borrowers versus whites with equivalent credit scores. The City further alleges that these lending practices led to a spike in foreclosures in neighborhoods populated by minorities, who had difficulty keeping up with these loans’ higher interest rates.
In legal terms, the predatory practice which Wells Fargo has allegedly engaged in is called “redlining.” This occurs when a bank discriminates in its lending policy against a specific geographic location, based upon its racial demographics. This practice is banned by the U.S. Constitution. For its part, Wells Fargo denies any wrongful activity. According to the bank, it engages in fair and non-discriminatory lending practices to all of Philadelphia’s residents.
Karl Heideck is an attorney at the law firm of Grant and Eisenhower, PA, which specializes in complex banking fraud and malpractice litigation, in particular as they relate to the 2008 housing market crisis. Karl Heideck graduated from Temple University Law School with honors in 2009, and for the last eight years has been litigating a wide variety of finance and banking related cases. In his practice of law, he has acquired specialized experience in securities fraud, pharmaceutical litigation, and bankruptcy issues.In his current role, Karl Heideck’s practice focuses on cases which relate to liquidity, acquisitions, and risk management. As a contract attorney, Karl primarily engages in the review of discovery materials for these highly complex securities cases.