Memphis, Shelby Co. sue Wells Fargo for loans

AP News
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Posted: Dec 31, 2009 9:43 AM

Memphis city and Shelby County officials have filed a federal civil lawsuit against Wells Fargo Bank alleging discriminatory mortgage lending practices.

The lawsuit filed Wednesday in U.S. District Court in Memphis alleges that the lender targeted minority communities for predatory practices that resulted in a higher number of foreclosures in those areas.

The governments claim that the foreclosures caused extreme blighting, vacancies, reduced property values and lower tax revenues. The lawsuit asks for compensation to be determined by a jury.

Other cities, like Baltimore and Cleveland, have also filed lawsuits against lenders claiming subprime lending practices devastated neighborhoods and hurt property values and city tax collections.

An e-mail request seeking comment from Wells Fargo was not immediately returned Wednesday.