Wells Fargo has got embroiled in foreclosure related legal suit with charges being brought against the firm for peddling sub-prime mortgages exclusively to Blacks.

Officials from Baltimore city and the state officials across USA have made investigations and often brought legal charges against Well Fargo for discriminating against the Blacks in their lending practices. The Attorney General of Illinois has made enquiries as to the violation of fair lending civil rights legalities by the bank when they coaxed the Blacks and Hispanics into high interest loans. The Attorney General of New York Andrew Cuomo posed questions of a similar nature about the lending dealings of not only Wells Fargo but of other big banks like JPMorgan Chase and Citigroup.

NAACP has initiated a class-action suit against Walls Fargo and against twelve other banks for systematically following a policy of racial bias in their banking dealings. At the core of such nefarious activities is the previous practice of redlining when the banks had outlined specific areas where loans would not be given because of predominance of minority residents.

The New York Times recently conducted a survey of mortgage lending in the city of New York. It observed that black families with an annual income of over $68,000 was five times more likely to be holding sub-prime mortgages in comparison with Whites in the same income bracket or in some instances even lower. The difference was highly noticeable in the case of Wells Fargo. In that same economic bracket it had 2% Whites holding its sub-prime mortgages as against 16.1% Blacks who had been peddled these toxic loans.

Eric Halperin of Center for Responsible Lending, Washington office said, "We’ve known that African-Americans and Latinos are getting sub-prime loans while whites of the same credit profile are getting the lower-cost loans. The question has been why, and the gory details of this complaint may provide an answer."

Two loan officers, Beth Jacobson and Tony Paschal who were previously loan officers of Wells Fargo have made serious charges against the bank in their affidavits. This has given a boost to the plaintiffs. The loans made to the Blacks were referred to as ‘ghetto loans’ and the minorities were termed ‘mud people’ by the bank. In the affidavits it was further stated that special monetary incentives were offered to the loan officers to lure in the Blacks and Hispanics into the loan net.