Two former Wells Fargo subprime-loan officers say bank employees targeted predominantly black ZIP codes and churches and deceptively steered prime borrowers into subprime loans. Selling the most profitable product is, by itself, not a crime. Mortgage brokers across the United States did the same thing.

In Baltimore, the city filed suit against Wells Fargo. The suit alleges that Wells Fargo engaged in “reverse redlining,” targeting black neighborhoods for bad loans that resulted in mass foreclosures. We monitored the Wells Fargo situation in general for many years. People should remember that Wells was threatened with suits by Acorn.

Wells Fargo maintained that loan decisions were based on risk, not ethnicity or red-lining.

The suit, however, alleges that the loan officers who worked for Wells Fargo in the Baltimore-Washington area from the late 1990s until 2007, referred to subprime loans in minority communities as “ghetto loans” and to borrowers as “mud people.”

I am not defending Wells Fargo, nor making a judgement before having all the facts. I do remember, however, that Household International tried to blame nationwide predatory lending problems on one “rogue office in Bellingham Washington”, which turned out to be an outright lie.

Are Baltimore-Washington Wells Fargo employees stupid? Do they have a complaint now, or are they unemployed? Facts will be known soon, but these loan officers are now classified as whistle-blowers. In their sworn testimony they claim “the bank focused efforts on predominantly black zip codes, translated marketing literature into street vernacular, and referred to borrowers as mud people.”

Nationwide, and NOT restricted to Wells Fargo, predominately black neighborhoods inside the inner-city loops of major cities are seeing a huge foreclosure problem. Is this a black issue, redlining, or just an effort to loan fairly to everyone? What about the Community Reinvestment Act?

Regardless of the outcome I tend to think that slurs are uncalled for. Respect for each other and a professional approach to business goes a long way. Is this an office management problem? Perhaps we should re-think the validity of referring to each other by the “N”-word on a daily basis.

Some people – white and black – sold their homes to the mortgage company, and never intended to repay the loan. Mortgage brokers and sales agents didn’t care. Everyone made money for a while. Other borrowers were hurt. It wasn’t a “Wells Fargo thing” – it was a nationwide subprime greed thing. Over 150 lenders are now out of business.