How banks did more harm to Baltimore than rioters

Global Reseach - Baltimore was hit especially hard by the 2008 economic collapse. In 2008, 3,909 foreclosures were filed in the city of Baltimore. In 2009, the number increased to 6,213 – an almost 60 percent increase. The city’s median property value dropped by $10,500 between 2007-2012. And as of 2014, the city is ranked 69th out of 100 by Brookings on the strength of its economic recovery.

Even while Baltimore and other cities struggled, the federal government held corporations in higher regard than the American people; $1.2 trillion in post-recession bailouts from the Federal Reserve to private banks was equal to the money lost by homeowners holding 6.5 million foreclosed mortgages.

... On January 8, 2008, former Baltimore mayor Sheila Dixon’s administration filed a suit against Wells Fargo in the U.S. District Court. The city claimed that Wells Fargo charged higher fees to black borrowers through their subprime lending program designed for less creditworthy consumers who are more likely to default on loans. The city claimed that the bank’s discriminatory and predatory lending practices led to foreclosures, reduced city tax revenues, and increased city costs due to the crimes surrounding the abandoned properties. The city asked for the bank to cover costs associated with these damages.

In 2010, the bank won the dismissal of the lawsuit brought by Baltimore. However, in 2012, the U.S. Department of Justice sued Wells Fargo for failing to report more than 6,000 loans that did not meet insurance requirements under the Federal Housing Administration, and for its failure to properly review early payment defaults. The bank settled, paying $17.5 million to the city of Baltimore and $2.5 million to 1,000 area residents who were affected.