Baltimore files new complaint against Wells Fargo

City claims property damages, extra costs from foreclosures

April 08, 2010|By Robbie Whelan

Lawyers for the city of Baltimore have prepared a new complaint in their lawsuit against Wells Fargo, which contends that the bank steered black borrowers into subprime loans, then foreclosed on hundreds of city houses, leading to blight and higher public safety costs.

The city suffered a setback in January when U.S. District Judge J. Frederick Motz dismissed the suit. Motz said the connection between the Wells Fargo foreclosures and urban problems was "implausible when considered against the background of other factors leading to the deterioration of the inner city," and called the suit overly broad.

City Solicitor George Nilson said Wednesday that the new complaint, which was filed Wednesday, outlines specific property damages - including millions in costs to city fire and police services - to more than 200 vacant, foreclosed properties spread out over 36 city blocks.

The new complaint also separates damages incurred by the city in the form of lost property taxes, Nilson said. When the foreclosed homes became vacant, the city alleges, many of them lost much of their value and drove down the value of nearby homes, leading to lost property tax revenue for the city.

Wells Fargo's attorney, Andrew L. Sandler, said Wednesday he thought that Motz's reasons for dismissing the last version of the case were "pretty clear," and said the case has no merit. A spokeswoman for the company said Wells Fargo stands by its lending practices, which it considers "fair and responsible."

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