June 22nd, 2012 
AT2W Staff 
Wells Fargo Faces Accusations of Leading Black Homebuyers Into Subprime Mortgages
Here’s just one more instance where financial institutions practice systematic racism in order to downgrade, mislead and purposely tarnished the credit and good name of hard working African Americans who want the American dream too- to own a home. We pray that all of the facts come out and that Wells Fargo repays heavily for the damage and stress they have caused these people and their families.
What is a subprime mortgage?
A subprime mortgage is a type of loan granted to individuals with poor credit histories (often below 600), who, as a result of their deficient credit ratings, would not be able to qualify for conventional mortgages. Because subprime borrowers present a higher risk for lenders, subprime mortgages charge interest rates above the prime lending rate. Source
Please pay attention to the twist in these subprime mortgages targeted for Blacks.
In sworn court testimony, Beth Jacobson described watching loan officers comb through heavily African-American areas such as Baltimore and Prince George’s County, Md., forging relationships with churches and community groups to sell their members shoddy mortgages. She says she processed loans for homeowners with sterling credit ratings with higher interest rates than they needed to pay. And she says she pumped out millions of dollars in mortgages to people with no paperwork and low incomes, becoming Wells Fargo’s top-producing loan officer.
The Charlotte Observer reported Jacobson said her job in Wells Fargo’s subprime unit was straightforward: Get people approved.
In her affidavit, she said the quickest and most profitable way to make loans was to steer borrowers into the new breed of subprime mortgages. That meant customers were offered subprime mortgages even if they qualified for better interest rates. It didn’t matter if they couldn’t afford the mortgage in the long run. All loan officers were paid by the number of loans they approved, not whether they succeeded, she said.
In return for her dedicated work for churning roughly $50 million in loans annually, she was awarded and granted these benefits and gifts:
- It made her the top-producing subprime officer in the country (guess she’s not so proud of that title now).
- She earned $700,000 one year. (More than seven times the company’s stated average for subprime-loan officers in her area).
- She received all-expenses-paid trips to Cancun and the Bahamas.
- She bought a home in Federalsburg, Md., with her husband.
- She bought an investment property down the street.
- She owned vacation house in Virginia.
These rewards she received have now been lost through foreclosure or ceased; the very thing that happened to the people she approved loans for at Wells Fargo.
This ‘well run machine’ made her rich but at what extraordinary cost?
The company flatly denies any wrongdoing, especially when it comes to Jacobson’s claims. It calls her testimony misleading at best and, at worst, outright lies.
The 51-year-old Maryland resident has emerged as a defining character in the ongoing saga of the country’s housing crisis, from the headiest days of the bubble to the current flood of foreclosures. Her scathing affidavit detailing “the stagecoach to hell” at Wells Fargo is a key part of the groundbreaking lawsuit filed by the city of Baltimore against her former employer. The case spawned copycats across the nation, and federal regulators launched investigations mirroring its allegations.
Read more HERE
How about starting a legitimate business?
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