Wells Fargo mortgage case in Baltimore dismissed

January 07, 2010
Baltimore's defeat in a lawsuit accusing Wells Fargo & Co of steering minority borrowers to expensive home loans may not derail efforts by local governments to hold the biggest mortgage providers responsible for lending they contend hurts cities.
     Nonetheless, the dismissal of Baltimore's two-year-old federal lawsuit is another setback to legal efforts by state and local governments to combat the economic and social costs of mounting foreclosures and falling housing prices.
     Baltimore was the first major American city to accuse a mortgage lender of violating the federal Fair Housing Act with predatory lending practices that exacerbated the nation's housing slump.
     On Wednesday, U.S. District Judge J. Frederick Motz dismissed its case. Last August, a federal judge dismissed a similar lawsuit brought by Birmingham, Alabama against Bank of America Corp and Citigroup Inc.
     "It is difficult for cities to show a causal link between one lender's actions and overall economic blight," said Linda Fisher, a law professor at Seton Hall University in Newark, New Jersey who has written about reverse redlining and the correlation between race and subprime lending. "Cities may need to tailor their lawsuits more narrowly."