(2005) A Case of Black and White - Inequalities in Wells Fargo's Lending

A Case of Black and White:
Racial Inequalities in Wells Fargos

Mortgage Lending
September 2005
ACORN Report
The Association of Community Organizations for Reform Now

Racial Inequalities in Wells Fargos Mortgage Lending
Table of Contents
Introduction
Findings
- Wells Fargos Lending Nationally
- Wells Fargos Lending By State
- Wells Fargos Lending By Metropolitan Areas
16
Methodology
24
An Analysis of Wells Fargo Lending Reforms
25
The Association of Community Organizations for Reform Now ACORN Report

Introduction
The history of housing discrimination in the United States is a long and shameful one homeowners
imposing deed restrictions preventing the sale of homes to people of color, the Federal Housing
Administration (FHA) determining home values based on a neighborhoods racial makeup, white
residents violently greeting Martin Luther Kings open housing marches, banks drawing redlines around
certain neighborhoods where they wouldnt lend, loan officers coding applications to tell the underwriter
when it was a minority applicant, white home owners openly refusing to sell to people of color, and real
estate agents steering minority homebuyers to minority areas.
Housing discrimination has continued and evolved into new forms. Over the last five years in the area of
mortgage lending, community groups have focused their attention less on access to credit and more on the
type of credit that is granted. Several studies have documented that when buying or refinancing a home,
borrowers of color, and African-Americans in particular, receive mortgages with much less favorable
terms than whites receive1. African-Americans have been segregated into the subprime market where they
receive loans with higher interest rates, larger fees, and onerous features such as prepayment penalties.
Subprime loans are intended for people who are unable to obtain a conventional prime loan, and the
higher interest rates are supposedly to compensate for the potentially greater risk that these borrowers
represent. Predatory lending occurs when loan terms or conditions become abusive or when borrowers
who would qualify for credit on better terms are targeted instead for these higher cost loans.
Many in the lending industry argue that the disproportionate concentration of subprime loans among
minority borrowers is only a reflection of the greater risk that these borrowers represent based on their
lower credit ratings. However, Fannie Mae has stated that the racial disparities in subprime lending
cannot be justified by credit quality alone and has estimated that as many as half of the borrowers in
subprime loans could have instead qualified for a lower cost mortgage2.
In response to the growing concern about predatory lending and discriminatory pricing, the Federal
Reserve Board issued new guidelines for the Home Mortgage Disclosure Act (HMDA). Starting in 2004,
lenders had to report loans that had a high rate (and thus were subprime), making possible for the first
time a statistical analysis of the types of loans a lender originates. On average in 2004, high rate loans
were defined as first mortgages with Annual Percentage Rates (APRs) above 8% and second mortgages
with APRs above 10%.
For several years, Wells Fargo has promoted itself as the largest lender to African-American homebuyers.
The new HMDA data allows us to look deeper into this statement, examine the quality not just quantity of
the loans they make to African-Americans, and compare this lending to their lending to whites.
The results are disturbing, coming almost thirty years after the enactment of the Fair Housing Act.
1
Curbing Predatory Home Mortgage Lending: A Joint Report, June 2000, U.S. Department of Housing and Urban
Development and U.S. Department of Treasury
2
Financial Services in Distressed Communities, Fannie Mae Foundation, August 2001.

When reviewing the combined totals of all of Wells Fargos lending operations, one out of every four
mortgages made to African-Americans was a high rate loan (24.71%), and one out of every nine
loans made to Latinos (11.65%) had a high rate, compared to just one of out every thirteen loans to
whites (7.44%).
In comparative terms, this means that African-Americans were 3.3 times more likely than whites to
receive a higher cost subprime loan from Wells Fargo and that Latinos were 1.6 times more likely than
whites.
However, when we look at just the lending from Wells Fargo Bank and Wells Fargo Home Mortgage, the
disparities are even greater. Nationally, African-Americans were four times more likely than whites
to receive a higher cost subprime loan, and Latinos were almost twice as likely as whites to receive a
higher cost subprime loan.
In this report, we looked at Wells Fargos lending in each of the 50 states and in 50 individual
metropolitan areas and examined it in two ways: 1) looking at all of Wells Fargos companies together3;
and 2) looking at just Wells Fargo Bank and Wells Fargo Home Mortgage together.
In a number of the states and even more so in some of the metropolitan areas, the level of inequality is far
greater than that for the country as a whole.
California, the state with by far the largest total of Wells Fargo loans, also had the greatest
disparities of any state. When receiving a loan from one of Wells Fargos lending companies,
African-Americans were 5.3 times more likely than whites to receive a subprime loan, and Latinos
were 3.4 times more likely than whites.
The disparities are even more startling in reviewing Wells Fargos lending in individual metro areas.
Across all of Wells Fargos lending operations, African-Americans:
in the Miami metropolitan area were 8.3 times more likely than whites to get a subprime loan.
in the Philadelphia area were 6.9 times more likely than whites to receive a higher cost
subprime loan.
in the Washington, DC metropolitan area were 5.3 times more likely than whites to receive a
high rate loan.
Latinos who received a loan from one of Wells Fargos lending companies:
in the Los Angeles metro area were 5.3 times more likely than whites to receive a subprime loan.
Wells Fargo Financial, Wells Fargo Funding, Wells Fargo Joint Venture, and Wells Fargo Mortgage Venture, in addition to
the Bank and Mortgage company.

in the Tucson metropolitan area were 2.9 times more likely than whites to get a subprime
loan.
In 2003, ACORN launched a national campaign to shed light on Wells Fargos abusive lending, to force
them to change their predatory practices, and to win some compensation for the borrowers they had
harmed.
The campaign has included a steady and escalating series of actions, from demonstrations at local Wells
Fargo offices throughout the country to a 2,000 person march to Wells Fargos downtown Los Angeles
office last summer. At Wells Fargos shareholder meeting in April 2005, 15 members were able to go
inside the meeting and directly confront CEO Richard Kovacevich about Wells Fargos abusive loans.
As part of the campaign ACORN has also filed three lawsuits against Wells Fargo charging the company
with unfair and deceptive lending practices, such as using bait-and-switch sales tactics. In addition,
ACORN has submitted complaints to several state and regulatory agencies asking them to investigate
Wells Fargo.
Although Wells Fargo has denied they engage in predatory lending, they have gradually been making the
changes that ACORN demanded, including some that were just announced on August 30, 2005.
However, even with the most recent changes, there are still large areas that Wells Fargo has not
addressed, and for every practice they say they are changing, there are thousands of innocent borrowers
who have been harmed by that practice and whom Wells Fargo should compensate.
Equally important is that Wells Fargo needs to address the serious racial disparities that are present in its
lending and that are documented in this report.

Findings
NATIONALLY
African-American and Latino borrowers are far more likely than whites to receive a
high rate subprime loan at Wells Fargo.
African-Americans who got a loan from a Wells Fargo company were 3.3 times more likely than whites
to get a higher rate subprime loan.
At Wells Fargo Bank or Wells Fargo Home Mortgage, African-Americans were four times more likely
than whites to receive a higher cost subprime loan..
Borrower
Race/
Ethnicity
AfricanAmerican
Whites
Wells Fargo Bank and Wells Fargo Home

Mortgage
Total # of
# of
Subprime
mortgages
Subprime
Loans as
Mortgages
Percentage
of all Loans
43,756
5,372
12.28%
633,969
19,680
3.10%
All Wells Fargo Lending Companies

Total # of
mortgages
# of
Subprime
Mortgages
53,988
13,341
Subprime
Loans as
Percentage
of all Loans
24.71%
690,735
51,381
7.44%
Percentage of Subprime Loans for Wells Fargo

Nationally
30.00%
25.00%
All of WF Lending
Companies
20.00%
15.00%
WF Bank and WF Home

Mortgage
10.00%
5.00%
0.00%
AfricanAmerican
Latino
White
Latinos who received a mortgage from a Wells Fargo company were 1.6 times more likely than whites to
receive a high rate loan.

Latinos who received a mortgage from Wells Fargo Bank or Wells Fargo Home Mortgage were 1.8 times
more likely than whites to receive a higher cost subprime loan.
Borrower
Race
Latinos
Whites
Wells Fargo Bank and Wells Fargo Home

Mortgage
Total # of
# of
Subprime
mortgages
Subprime
Loans as
Mortgages
Percentage
of all Loans
64,755
3,572
5.52%
633,969
19,680
3.10%

Total # of
mortgages
# of
Subprime
Mortgages
74,046
690,735
8,626
51,381
Subprime
Loans as
Percentage
of all Loans
11.65%
7.44%
African-Americans received a much larger share of Wells Fargos high rate loans than of their
prime loans. Nationally, across all of Wells lending companies, African-Americans received 15% of
Wells Fargos subprime loans, or one out of every seven subprime loans made by Wells Fargo. In
contrast, African-Americans received a three times smaller share of the lenders prime loans just 4.7%,
or one out of every twenty-one prime loans made by Wells Fargo.
Latinos received 7.49% of Wells Fargos prime loans and 9.72% of the high rate loans.
In contrast, White borrowers received a larger share of Wells Fargos prime loans than of the subprime
loans. Wells Fargo made 73.2% of its prime loans to white borrowers, compared to 57.9% of its subprime
loans.

STATES
As shown on the charts on pages 9 and 10, the racial disparities between Wells Fargos
lending to African-Americans and its lending to whites are present throughout the country.
However, a number of states had levels of disparity greater than that for the country as a whole. In Wells
Fargo Bank and Wells Fargo Home Mortgages lending in Wisconsin and California, African-Americans
were over six times more likely than whites to receive a high cost subprime loan and in South Carolina
African-Americans were more than five times as likely as whites to receive a subprime loan.
In just ten states, African-Americans were less than 1.5 times as likely as whites to receive a subprime
loan at Wells Fargo Bank and Wells Fargo Home Mortgage. All of the ten states have minimal AfricanAmerican populations (Hawaii, Vermont, North Dakota, New Hampshire, Montana, Idaho, New Mexico,
South Dakota, Utah, and Alaska).
In contrast, the ten states with the largest African-American populations also had large levels of disparity.
Of these states, California had the greatest disparity with African-Americans being 6.1 times more likely
than whites to receive a subprime loan. The least disparity among these states was in New York where
African-Americans were still 2.4 times more likely to receive a subprime loan at Wells Fargo.
Wells Fargo Bank and Wells Fargo Home Mortgages Lending in the States with the Largest
AFRICAN-AMERICAN Populations
State
California
Florida
Michigan
Louisiana
North Carolina
Maryland
Illinois
Georgia
Texas
New York
Percentage of Wells Fargo

Mortgages to AFRICANAMERICANS That Were
Subprime
Percentage of Wells Fargo

Mortgages to Whites That
Were Subprime
4.71%
8.78%
15.97%
27.69%
8.29%
9.38%
16.55%
10.94%
13.58%
6.82%
0.77%
1.98%
4.22%
7.54%
2.29%
2.60%
4.71%
3.34%
5.01%
2.85%
Disparity Between
AFRICAN-AMERICAN and
white customers
6.1
4.4
3.8
3.7
3.6
3.6
3.5
3.3
2.7
2.4
When we include all of Wells Fargos companies in the evaluation, the racial inequalities persist. In
California, African-American borrowers were 5.3 times more likely than whites to receive a high rate
subprime loan.
In evaluating Wells Fargo in this manner, though, there are just six states in which African-Americans
were less than 1.5 times as likely as whites to receive a subprime loan. Again, these are states with

minimal African-American populations: Maine, Rhode Island, Idaho, Hawaii, New Hampshire, and
Vermont.
As with the review of just Wells Fargo Bank and Wells Fargo Home Mortgages lending, the racial
disparities are very large in the states with the largest African-American populations.
State
California
Florida
Michigan
Louisiana
North Carolina
Maryland
Illinois
Georgia
Texas
New York
All of Wells Fargos Companies Lending in the States with the

Largest AFRICAN-AMERICAN Populations
Percentage of Wells
Percentage of Wells
Fargo Mortgages to
Fargo Mortgages to
Disparity Between
AFRICANWhites That Were
AFRICANAMERICANS That
Subprime
AMERICAN and
Were Subprime
white customers
11.50%
2.19%
5.3
24.19%
5.42%
4.5
24.30%
6.37%
3.8
27.69%
7.54%
3.7
8.29%
2.29%
3.6
9.38%
2.60%
3.6
16.55%
4.71%
3.5
10.94%
3.34%
3.3
26.13%
9.19%
2.8
15.53%
5.35%
2.9
The disparity between white and Latino Wells Fargo customers is less dramatic than that for AfricanAmericans but still of serious concern.
In Wells Fargo Bank and Wells Fargo Home Mortgages lending, several of the states with the largest
Latino populations also had high levels of inequality. For instance, Latinos:
in California were 3.6 times more likely than whites to receive a subprime loan
in New Mexico were 2.8 times more likely than whites
in Colorado were 2.7 times more likely than whites
and in Texas and Arizona were 2.6 times more likely than whites.

African-Americans -- Wells Fargo Bank and Wells Fargo Home Mortgage
Percentage of Mortgages to
AFRICAN-AMERICANS That
Were Subprime
Whites That Were Subprime
Disparity Between
white customers
Wisconsin
California
South Carolina
New Jersey
Nebraska
Pennsylvania
Florida
Missouri
Maine
Tennessee
Virginia
Connecticut
Indiana
Kansas
Michigan
Louisiana
Delaware
North Carolina
Maryland
Illinois
Oregon
Mississippi
Georgia
Alabama
Colorado
Ohio
Massachusetts
Wyoming
Arkansas
Nevada
Texas
Rhode Island
Kentucky
Minnesota
New York
27.36%
4.71%
21.89%
10.92%
18.54%
16.19%
8.78%
28.65%
12.50%
16.79%
10.41%
6.49%
26.26%
19.79%
15.97%
27.69%
9.89%
8.29%
9.38%
16.55%
5.98%
35.87%
10.94%
18.84%
4.16%
15.71%
4.19%
12.50%
21.81%
6.04%
13.58%
6.93%
8.68%
5.92%
6.82%
4.17%
0.77%
4.20%
2.28%
3.95%
3.54%
1.98%
6.55%
3.09%
4.23%
2.64%
1.65%
6.86%
5.18%
4.22%
7.54%
2.73%
2.29%
2.60%
4.71%
1.74%
10.87%
3.34%
5.77%
1.30%
5.05%
1.48%
4.40%
7.72%
2.19%
5.01%
2.83%
3.56%
2.45%
2.85%
6.57
6.10
5.22
4.80
4.69
4.58
4.43
4.37
4.04
3.97
3.95
3.92
3.83
3.82
3.78
3.67
3.63
3.62
3.61
3.51
3.45
3.30
3.28
3.26
3.19
3.11
2.84
2.84
2.82
2.76
2.71
2.45
2.44
2.42
2.39
West Virginia
Iowa
Oklahoma
Washington
Arizona
Alaska
South Dakota
Utah
New Mexico
Hawaii
Idaho
Montana
New Hampshire
North Dakota
Vermont
26.23%
15.34%
24.38%
3.34%
5.19%
5.17%
7.14%
5.00%
4.94%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
11.00%
6.62%
10.89%
1.54%
2.87%
3.35%
4.68%
3.28%
3.71%
0.61%
3.23%
4.27%
1.27%
5.05%
2.71%
2.39
2.32
2.24
2.17
1.81
1.54
1.53
1.52
1.33
0.00
0.00
0.00
0.00
0.00
0.00
State
The Association of Community Organizations for Reform Now ACORN Report 10

African-Americans -- All Wells Fargo Lending Companies
Were Subprime
Disparity Between
white customers
California
Connecticut
Florida
New Jersey
Wisconsin
Michigan
South Carolina
Virginia
Delaware
Nebraska
Kansas
Pennsylvania
North Carolina
Maryland
Colorado
Indiana
Tennessee
New York
Texas
Georgia
Arkansas
Oregon
Missouri
Ohio
Illinois
Arizona
Wyoming
Alabama
North Dakota
Iowa
Washington
Mississippi
Minnesota
South Dakota
Louisiana
11.50%
18.65%
24.19%
16.48%
40.46%
24.30%
46.81%
18.03%
17.77%
34.60%
36.88%
27.86%
19.65%
17.29%
15.68%
41.06%
35.74%
15.53%
26.13%
21.94%
20.78%
14.58%
41.92%
30.35%
28.64%
14.58%
30.00%
50.46%
30.00%
29.29%
12.70%
56.25%
10.91%
17.65%
52.37%
2.19%
4.01%
5.42%
3.91%
9.96%
6.37%
12.30%
4.78%
4.89%
10.24%
10.93%
8.26%
5.90%
5.30%
4.91%
12.99%
11.91%
5.35%
9.19%
7.76%
7.46%
5.40%
16.01%
11.70%
11.37%
5.81%
12.15%
20.48%
12.33%
12.16%
5.38%
23.93%
4.72%
7.91%
23.85%
5.25
4.65
4.47
4.22
4.06
3.81
3.81
3.77
3.64
3.38
3.37
3.37
3.33
3.26
3.19
3.16
3.00
2.90
2.84
2.83
2.79
2.70
2.62
2.59
2.52
2.51
2.47
2.46
2.43
2.41
2.36
2.35
2.31
2.23
2.20
Nevada
New Mexico
Utah
Massachusetts
Alaska
Oklahoma
Montana
West Virginia
Maine
Rhode Island
Idaho
Hawaii
New Hampshire
Vermont
17.87%
21.36%
24.53%
9.78%
16.42%
46.21%
25.00%
41.46%
12.50%
15.25%
9.52%
1.56%
0.00%
0.00%
8.25%
10.82%
12.66%
5.12%
8.64%
24.69%
13.50%
27.73%
8.38%
11.03%
9.93%
1.87%
1.95%
2.67%
2.17
1.97
1.94
1.91
1.90
1.87
1.85
1.50
1.49
1.38
0.96
0.83
0.00
0.00
State

Latinos -- Wells Fargo Bank and Wells Fargo Home Mortgage
State
Vermont
California
New Mexico
Colorado
Kansas
Texas
Arizona
New Hampshire
New Jersey
Pennsylvania
Michigan
Nebraska
Wisconsin
South Carolina
Connecticut
Montana
Nevada
Washington
Idaho
Louisiana
Massachusetts
Tennessee
Indiana
Maryland
Missouri
Minnesota
North Dakota
Oregon
Utah
Mississippi
Iowa
Maine
Oklahoma
Florida
North Carolina
Wyoming
Georgia
Illinois
Kentucky
Delaware
Virginia
Ohio
New York
Alabama
Arkansas
Alaska
Rhode Island
West Virginia
Hawaii
South Dakota
Percentage of Mortgages
to LATINOS That Were
Subprime
16.67%
2.78%
10.55%
3.50%
13.85%
13.17%
7.33%
3.03%
5.19%
7.92%
9.19%
8.11%
8.15%
8.14%
3.19%
8.22%
4.18%
2.89%
5.92%
13.49%
2.64%
7.39%
11.81%
4.45%
10.82%
3.89%
8.00%
2.74%
4.73%
15.56%
9.41%
4.35%
14.53%
2.59%
2.94%
5.56%
3.85%
5.06%
3.75%
2.83%
2.54%
4.83%
2.45%
4.88%
4.48%
1.64%
1.37%
3.57%
0.00%
to Whites That Were
Subprime
2.71%
0.77%
3.71%
1.30%
5.18%
5.01%
2.87%
1.27%
2.28%
3.54%
4.22%
3.95%
4.17%
4.20%
1.65%
4.27%
2.19%
1.54%
3.23%
7.54%
1.48%
4.23%
6.86%
2.60%
6.55%
2.45%
5.05%
1.74%
3.28%
10.87%
6.62%
3.09%
10.89%
1.98%
2.29%
4.40%
3.34%
4.71%
3.56%
2.73%
2.64%
5.05%
2.85%
5.77%
7.72%
3.35%
2.83%
11.00%
0.61%
Disparity Between
LATINO and white
customers
6.15
3.61
2.84
2.69
2.67
2.63
2.55
2.39
2.28
2.24
2.18
2.05
1.95
1.94
1.93
1.93
1.91
1.88
1.83
1.79
1.78
1.75
1.72
1.71
1.65
1.59
1.58
1.57
1.44
1.43
1.42
1.41
1.33
1.31
1.28
1.26
1.15
1.07
1.05
1.04
0.96
0.96
0.86
0.85
0.58
0.49
0.48
0.32
0.00
0.00%
4.68%
0.00

Latinos -- All Wells Fargo Lending Companies
to LATINOS That Were
Subprime
to Whites That Were
Subprime
Disparity Between
LATINO and white
customers
Hawaii
California
Texas
New Mexico
Arizona
North Dakota
New Jersey
Michigan
Colorado
Connecticut
Wyoming
Oregon
Kansas
Idaho
Wisconsin
6.54%
7.45%
24.41%
27.35%
14.62%
28.13%
7.91%
12.50%
9.44%
7.30%
22.08%
8.97%
17.95%
15.63%
15.60%
1.87%
2.19%
9.19%
10.82%
5.81%
12.33%
3.91%
6.37%
4.91%
4.01%
12.15%
5.40%
10.93%
9.93%
9.96%
3.49
3.40
2.66
2.53
2.51
2.28
2.03
1.96
1.92
1.82
1.82
1.66
1.64
1.57
1.57
New Hampshire
Nevada
Minnesota
Nebraska
Pennsylvania
Utah
Alaska
Delaware
Montana
Washington
Maryland
Indiana
Iowa
South Carolina
Massachusetts
Alabama
South Dakota
Mississippi
Missouri
Louisiana
Oklahoma
New York
Illinois
Florida
Georgia
Virginia
Tennessee
Ohio
North Carolina
Arkansas
Maine
Rhode Island
West Virginia
Vermont
3.03%
12.78%
7.21%
15.43%
12.41%
17.71%
11.19%
6.31%
17.07%
6.77%
6.49%
14.70%
13.45%
13.57%
5.56%
22.12%
8.25%
24.53%
16.00%
23.81%
24.12%
5.12%
10.32%
4.90%
6.91%
4.00%
9.78%
7.93%
3.64%
4.11%
4.00%
3.33%
5.26%
0.00%
1.95%
8.25%
4.72%
10.24%
8.26%
12.66%
8.64%
4.89%
13.50%
5.38%
5.30%
12.99%
12.16%
12.30%
5.12%
20.48%
7.91%
23.93%
16.01%
23.85%
24.69%
5.35%
11.37%
5.42%
7.76%
4.78%
11.91%
11.70%
5.90%
7.46%
8.38%
11.03%
27.73%
2.67%
1.56
1.55
1.53
1.51
1.50
1.40
1.30
1.29
1.27
1.26
1.22
1.13
1.11
1.10
1.09
1.08
1.04
1.02
1.00
1.00
0.98
0.96
0.91
0.90
0.89
0.84
0.82
0.68
0.62
0.55
0.48
0.30
0.19
0.00
State

African-Americans received a much larger share of Wells Fargos high rate loans than of their
prime loans.
In three states, African-Americans received more than a 4 times greater share of Wells Fargos subprime
loans in that state than of the companys prime loans.
Greatest Disparity Between African-American Share of Prime and Subprime Loans

All Wells Fargo Companies
State
African-American Share African-American Share Disparity Between
of Prime Loans
of Subprime Loans
Share of Prime and
Subprime
Wisconsin
2.18%
10.62%
4.88
South Carolina
8.51%
36.60%
4.30
Florida
4.85%
19.41%
4.00
Nebraska
1.85%
7.31%
3.96
Connecticut
3.60%
13.88%
3.85
Indiana
3.53%
13.50%
3.82
Michigan
5.69%
20.77%
3.65
Kansas
2.48%
8.46%
3.41
California
2.94%
9.97%
3.39
Pennsylvania
4.05%
13.70%
3.38
In only four states did African-Americans receive a larger share of prime loans than of subprime loans,
but in each of these states Wells Fargos total lending to African-Americans was minimal: Idaho, Hawaii,
New Hampshire, and Vermont.

Disparity Between African-American Share of Prime and Subprime Loans

State
Wisconsin
South Carolina
Florida
Nebraska
Connecticut
Indiana
Michigan
Kansas
California
Pennsylvania
Virginia
New Jersey
Delaware
Missouri
Tennessee
North Dakota
Wyoming
Colorado
Iowa
Ohio
New York
Arkansas
Alabama
Mississippi
North Carolina
Illinois
Oregon
Louisiana
Maryland
Georgia
South Dakota
Oklahoma
Texas
Minnesota
Montana
Nevada
Utah
Washington
Arizona
Massachusetts
West Virginia
Maine
Rhode Island
Alaska
New Mexico
Idaho
Hawaii
New Hampshire
Vermont
African-American Share
of Prime Loans
2.18%
8.51%
4.85%
1.85%
3.60%
3.53%
5.69%
2.48%
2.94%
4.05%
7.87%
5.49%
8.27%
5.30%
7.83%
0.22%
0.40%
1.47%
0.91%
5.41%
6.60%
5.04%
13.86%
12.14%
11.42%
7.55%
0.74%
15.26%
15.95%
16.47%
0.23%
4.30%
4.15%
1.44%
0.20%
3.46%
0.53%
1.74%
1.52%
4.06%
2.24%
0.29%
5.51%
1.97%
1.33%
0.24%
1.56%
0.66%
0.13%
African-American Share
of Subprime Loans
10.62%
36.60%
19.41%
7.31%
13.88%
13.50%
20.77%
8.46%
9.97%
13.70%
26.13%
17.94%
25.95%
16.39%
23.85%
0.66%
1.17%
4.23%
2.54%
15.10%
17.96%
13.66%
37.43%
31.96%
29.92%
19.27%
1.87%
37.85%
37.23%
37.27%
0.51%
9.59%
9.23%
3.18%
0.42%
7.26%
1.11%
3.52%
2.96%
7.81%
3.85%
0.44%
8.33%
2.88%
1.72%
0.22%
0.44%
0.00%
0.00%
Disparity Between Share

of Prime and Subprime
4.88
4.30
4.00
3.96
3.85
3.82
3.65
3.41
3.39
3.38
3.32
3.27
3.14
3.09
3.05
3.03
2.93
2.87
2.79
2.79
2.72
2.71
2.70
2.63
2.62
2.55
2.51
2.48
2.33
2.26
2.26
2.23
2.23
2.21
2.11
2.10
2.09
2.03
1.95
1.93
1.72
1.52
1.51
1.46
1.29
0.91
0.28
0.00
0.00

METROPOLITAN AREAS
The inequalities in Wells Fargos lending are even more apparent in individual
metropolitan statistical areas (MSAs).
In this report, we reviewed fifty MSAs encompassing most of the largest cities in the U.S.
In Wells Fargo Bank and Wells Fargo Home Mortgages lending in:
nine of the metropolitan areas, African-Americans were more than seven times as likely as
whites to receive a high cost subprime loan.
twelve of the metropolitan areas, African-Americans were over six times more likely than
eighteen of the metropolitan areas, African-Americans were more than five times as likely as
Large racial inequalities are present in some of the metropolitan areas with the largest African-American
populations, as shown in the chart below:
Wells Fargo Bank and Wells Fargo Home Mortgage Lending
in Metropolitan Areas with Large AFRICAN-AMERICAN Populations
Subprime Mortgages
Subprime Mortgages
Disparity Between
Metropolitan
as Percentage of Total as Percentage of Total
AFRICANStatistical Area (MSA)
Mortgages to
Mortgages to Whites
AMERICAN and
AFRICANwhite customers
AMERICANS
Milwaukee
31.20%
3.19%
9.8
Miami
11.68%
1.23%
9.5
Los Angeles
4.87%
0.56%
8.7
Philadelphia
18.96%
2.42%
7.8
Chicago
14.65%
2.05%
7.2
Washington, DC
9.16%
1.49%
6.1
New York
4.86%
0.81%
6.0
Newark
8.38%
1.46%
5.7
Detroit
19.97%
3.49%
5.7
In just one of the fifty metropolitan areas reviewed here were African-Americans less than twice as likely
as whites to receive a subprime loan (Providence).
When combining the lending of all Wells Fargos companies, the racial disparities remain, especially in
those same metropolitan areas with large African-American populations.

All Wells Fargo Lending in Metropolitan Areas with Large AFRICAN-AMERICAN Populations
Subprime Mortgages
Disparity Between
Subprime Mortgages
Metropolitan
as Percentage of Total as Percentage of Total
AFRICANMortgages to Whites
AMERICAN and
Statistical Area (MSA)
Mortgages to
white customers
AFRICANAMERICANS
Miami
21.53%
2.61%
8.25
Los Angeles
14.03%
1.64%
8.54
New York
12.83%
1.80%
7.12
Philadelphia
30.41%
4.44%
6.85
Washington DC
13.69%
2.60%
5.26
Milwaukee
44.22%
8.70%
5.08
Newark
14.92%
2.95%
5.06
Chicago
26.27%
6.64%
3.96
Detroit
29.13%
7.69%
3.79
As with its lending to African-Americans, Wells Fargo had serious disparities in its lending to Latinos in
areas with large Latino populations.
All Wells Fargo Companies Lending
in Metropolitan Areas with Large LATINO Populations
Percentage of
Percentage of
Disparity Between
Metropolitan
Subprime Mortgages
Subprime Mortgages
LATINO and white
Statistical Area (MSA)
to LATINOS
to Whites
customers
Los Angeles
8.70%
1.64%
5.30
Tucson
27.98%
9.69%
2.89
San Diego
4.15%
1.60%
2.59
San Antonio
19.89%
7.82%
2.54
New York
4.45%
1.80%
2.47
Houston
14.38%
5.97%
2.41

Wells Fargo Bank and Wells Fargo Home Mortgage
Metropolitan Statistical
Area (MSA)
San Francisco
Oakland
Milwaukee
Miami
Los Angeles
Philadelphia
San Diego
Raleigh
Chicago
Nassau-Suffolk
Washington, DC
Ft. Lauderdale
New York
Newark
Detroit
Kansas City
Cleveland
Memphis
Indianapolis
Charlotte
Baltimore
Hartford
St. Louis
Sacramento
Denver
Atlanta
Columbus
Portland
Houston
Tampa-St. Petersburg
Minneapolis
Louisville
Boston
Virginia Beach
Birmingham
Riverside-San Bernardino
Cincinnati
Little Rock
Wilmington
New Orleans
Las Vegas
Dallas
Orlando
Pittsburgh
Seattle
San Antonio
Phoenix
Tucson
El Paso
Providence
Were Subprime
Disparity Between
white customers
4.67%
3.68%
31.20%
11.68%
4.87%
18.96%
2.41%
7.33%
14.65%
5.79%
9.16%
11.28%
4.86%
8.38%
19.97%
22.66%
16.97%
20.97%
26.83%
11.65%
12.17%
6.73%
33.33%
4.49%
4.27%
10.13%
14.41%
4.59%
15.14%
7.11%
6.06%
9.04%
3.61%
10.56%
17.32%
6.05%
11.02%
20.00%
10.17%
19.41%
6.42%
8.59%
4.56%
14.41%
2.35%
11.57%
5.73%
7.50%
12.12%
11.43%
0.12%
0.36%
3.19%
1.23%
0.56%
2.42%
0.33%
1.01%
2.05%
0.94%
1.49%
1.86%
0.81%
1.46%
3.49%
4.17%
3.32%
4.35%
5.73%
2.61%
2.80%
1.58%
7.94%
1.12%
1.07%
2.80%
4.01%
1.28%
4.29%
2.03%
1.77%
2.64%
1.06%
3.11%
5.35%
1.87%
3.50%
6.49%
3.64%
7.01%
2.38%
3.32%
1.78%
5.80%
0.97%
5.22%
2.64%
3.63%
7.89%
9.22%
38.91
10.18
9.79
9.46
8.73
7.82
7.32
7.28
7.16
6.17
6.13
6.06
5.99
5.73
5.72
5.44
5.11
4.82
4.68
4.47
4.34
4.25
4.20
4.02
4.00
3.61
3.59
3.58
3.53
3.50
3.42
3.42
3.40
3.40
3.24
3.23
3.15
3.08
2.79
2.77
2.69
2.59
2.56
2.48
2.43
2.22
2.17
2.06
1.50
1.24

Area (MSA)
San Francisco
Los Angeles
Miami
New York
Philadelphia
Oakland
Raleigh
San Diego
Nassau-Suffolk
Washington DC
Ft. Lauderdale
Milwaukee
Newark
Hartford
Baltimore
Sacramento
Chicago
Detroit
Houston
Charlotte
Kansas City
Portland
Memphis
Pittsburgh
Indianapolis
Orlando
Cleveland
San Antonio
Seattle
Virginia Beach-Norfolk
Little Rock
Cincinnati
Atlanta
Tucson
Birmingham
Columbus
Dallas
Denver
Minneapolis-St. Paul
Wilmington
St. Louis
Phoenix
Boston
El Paso
Louisville
Las Vegas
New Orleans
Providence
Percentage of Subprime
Mortgages to AFRICANAMERICANS
5.79%
14.03%
21.53%
12.83%
30.41%
6.44%
10.00%
9.73%
16.45%
13.69%
18.97%
44.22%
14.92%
20.00%
23.90%
22.66%
11.41%
26.27%
29.13%
22.06%
26.51%
36.10%
12.03%
38.73%
36.42%
41.31%
15.42%
31.30%
25.00%
11.92%
17.65%
19.26%
30.38%
18.44%
13.01%
27.59%
46.85%
23.11%
20.95%
15.76%
11.37%
15.26%
46.11%
13.24%
7.00%
43.14%
32.05%
18.29%
42.52%
12.90%
Percentage of Subprime
Mortgages to Whites
0.28%
1.64%
2.61%
1.80%
4.44%
0.97%
1.51%
1.60%
2.96%
2.60%
3.67%
8.70%
2.95%
4.25%
5.57%
5.64%
2.86%
6.64%
7.69%
5.97%
7.53%
10.44%
3.53%
11.60%
11.02%
12.63%
4.79%
9.79%
7.82%
3.77%
5.59%
6.17%
10.26%
6.39%
4.55%
9.69%
16.50%
8.25%
7.54%
5.78%
4.24%
6.05%
18.43%
5.30%
2.89%
17.96%
13.51%
8.57%
20.16%
9.55%
Disparity Between
white customers
20.81
8.54
8.25
7.12
6.85
6.63
6.63
6.09
5.56
5.26
5.17
5.08
5.06
4.70
4.29
4.02
3.99
3.96
3.79
3.69
3.50
3.46
3.41
3.34
3.31
3.27
3.22
3.20
3.19
3.16
3.16
3.12
2.96
2.88
2.86
2.85
2.84
2.80
2.78
2.70
2.68
2.52
2.50
2.50
2.42
2.40
2.37
2.14
2.11
1.35

Wells Fargo Bank and Wells Fargo Home Mortgage
Metropolitan
Statistical Area (MSA)4
San Francisco
Los Angeles
Oakland
Milwaukee
Philadelphia
Newark
Nassau-Suffolk
Tucson
Boston
San Diego
Kansas City
Houston
Charlotte
New York
Sacramento
Phoenix
Denver
Washington, DC
San Antonio
Orlando
Miami
Chicago
Baltimore
Dallas
Seattle
Las Vegas
El Paso
Hartford
Ft. Lauderdale
Columbus
Portland
Atlanta
Raleigh
Providence
Percentage of
Mortgages to LATINOs
That Were Subprime
Percentage of
Mortgages to Whites
That Were Subprime
0.88%
3.31%
1.95%
12.92%
8.66%
4.98%
3.03%
11.45%
3.31%
1.01%
11.16%
10.79%
6.25%
1.87%
2.44%
5.68%
2.13%
2.91%
10.08%
3.39%
2.35%
3.86%
5.12%
5.79%
3.19%
1.64%
4.00%
2.89%
12.45%
2.19%
2.52%
4.27%
3.20%
1.25%
2.72%
1.92%
0.92%
1.19%
0.12%
0.56%
0.36%
3.19%
2.42%
1.46%
0.94%
3.63%
1.06%
0.33%
4.17%
4.29%
2.61%
0.81%
1.12%
2.64%
1.07%
1.49%
5.22%
1.78%
1.23%
2.05%
2.80%
3.32%
1.87%
0.97%
2.38%
1.77%
7.89%
1.58%
1.86%
4.01%
3.11%
1.28%
2.80%
2.03%
1.01%
2.18%
Disparity Between
LATINO and white
customers
7.29
5.93
5.40
4.06
3.57
3.40
3.23
3.15
3.12
3.05
2.68
2.51
2.40
2.30
2.18
2.15
2.00
1.95
1.93
1.91
1.90
1.89
1.83
1.74
1.71
1.70
1.68
1.63
1.58
1.38
1.35
1.06
1.03
0.98
0.97
0.94
0.91
0.55
Of the metropolitan areas reviewed, this chart does not include those with less than 100 mortgages to Latinos.


Area (MSA)5
San Francisco
Los Angeles
Oakland
Philadelphia
Tucson
Newark
San Diego
San Antonio
Milwaukee
New York
Houston
Phoenix
Dallas
Sacramento
El Paso
Boston
Nassau-Suffolk
Kansas City
Washington DC
Las Vegas
Miami
Baltimore
Denver
Hartford
Portland
Chicago
Ft. Lauderdale
Orlando
Seattle
St. Louis
Columbus
Atlanta
Raleigh
Providence
LATINOs That Were
Subprime
1.89%
8.70%
3.09%
13.96%
27.98%
7.71%
4.15%
19.89%
21.89%
4.45%
14.38%
10.84%
14.89%
5.34%
32.86%
5.16%
7.97%
4.96%
17.19%
4.06%
6.47%
12.89%
3.85%
8.03%
8.07%
8.16%
5.73%
4.71%
8.83%
4.70%
5.71%
4.26%
5.39%
16.94%
5.88%
4.48%
0.86%
2.89%
0.28%
1.64%
0.97%
4.44%
9.69%
2.95%
1.60%
7.82%
8.70%
1.80%
5.97%
5.30%
7.54%
2.86%
17.96%
2.89%
4.55%
2.96%
10.44%
2.60%
4.24%
8.57%
2.61%
5.59%
5.64%
5.78%
4.25%
3.53%
6.64%
3.67%
4.79%
3.77%
5.57%
18.43%
8.25%
6.39%
1.51%
9.55%
Disparity Between LATINO

and white customers
6.82
5.30
3.18
3.14
2.89
2.61
2.59
2.54
2.52
2.47
2.41
2.05
1.97
1.87
1.83
1.78
1.75
1.68
1.65
1.56
1.53
1.50
1.48
1.44
1.43
1.41
1.35
1.34
1.33
1.28
1.19
1.13
0.97
0.92
0.71
0.70
0.57
0.30
Of the metropolitan areas reviewed, this chart does not include those in which Wells Fargo made less than 100 mortgages to
Latinos.

African-Americans and Latinos received a much larger share of Wells Fargos high rate loans than
of their prime loans.
In eight metropolitan areas, African-Americans received more than a 4 times greater share of Wells
Fargos subprime loans in that state than of the companys prime loans.
Greatest Disparity Between African-American Share of Prime and Subprime Loans

Metropolitan Statistical African-American Share African-American Share Disparity Between
Area (MSA)
of Prime Loans
of Subprime Loans
Share of Prime and
Subprime
San Francisco
1.09%
13.73%
12.53
Miami
5.77%
29.90%
5.19
Philadelphia
6.67%
32.81%
4.92
Milwaukee
5.74%
27.46%
4.78
San Diego
2.42%
11.51%
4.77
Nassau-Suffolk
4.46%
20.19%
4.53
3.50%
14.86%
4.25
Oakland
5.20%
21.95%
4.22
Indianapolis
6.17%
22.62%
3.67
New York
8.96%
32.73%
3.65
In none of the fifty metropolitan areas did African-Americans receive a larger share of prime loans than of
subprime loans.
Among Latinos, the disparities were smaller, but still significant in a number of metropolitan areas.
Greatest Disparity Between Latino Share of Prime and Subprime Loans
Latino Share of Prime
Latino Share of
Disparity Between
Area (MSA)
Loans
Subprime Loans
Share of Prime and
Subprime
San Francisco
4.48%
17.65%
3.9
Tucson
15.40%
37.20%
2.4
Los Angeles
20.25%
40.24%
2.0
Oakland
7.06%
13.82%
2.0
San Diego
10.53%
20.14%
1.9
San Antonio
25.42%
47.23%
1.9
Philadelphia
2.32%
4.24%
1.8
Milwaukee
3.49%
5.91%
1.7
Phoenix-Mesa
14.53%
23.95%
1.6

Disparity Between African-American Share of Prime and Subprime Loans
Area (MSA)
San Francisco
Miami
Philadelphia
Milwaukee
San Diego
Nassau-Suffolk
Oakland
Indianapolis
New York
Ft. Lauderdale
Pittsburgh
Kansas City
Raleigh
Hartford
Cleveland
Los Angeles
Chicago
Cincinnati
Newark
Sacramento
St. Louis
Charlotte
Baltimore
Memphis
Portland
Seattle
Houston
Washington DC
Little Rock
Detroit
Orlando
Birmingham
Denver
Louisville
San Antonio
Columbus
Dallas
Tucson
Wilmington
Boston
El Paso
Atlanta
Phoenix
New Orleans
Las Vegas
Providence
African-American Share of
Prime Loans
African-American Share of
Subprime Loans
1.09%
5.77%
6.67%
5.74%
2.42%
4.46%
3.50%
5.20%
6.17%
8.96%
10.79%
2.36%
4.49%
10.89%
4.40%
6.33%
5.13%
9.04%
5.08%
7.37%
3.41%
7.16%
10.88%
11.80%
16.60%
1.14%
2.11%
5.32%
17.49%
8.68%
19.41%
5.53%
18.60%
2.08%
2.54%
5.73%
2.35%
6.43%
6.85%
13.75%
1.37%
8.28%
4.52%
7.33%
1.45%
18.77%
1.75%
19.07%
5.26%
4.90%
13.73%
29.90%
32.81%
27.46%
11.51%
20.19%
14.86%
21.95%
22.62%
32.73%
38.46%
8.37%
15.92%
38.52%
15.34%
21.73%
17.47%
30.20%
16.94%
23.38%
10.76%
21.67%
32.99%
35.13%
47.39%
3.19%
5.84%
14.75%
48.31%
23.64%
50.61%
14.29%
47.20%
5.28%
6.45%
14.31%
5.86%
16.05%
16.62%
32.80%
3.25%
18.99%
9.93%
16.03%
3.11%
39.72%
3.62%
39.07%
10.51%
6.99%
Disparity Between Share

of Prime and Subprime
12.53
5.19
4.92
4.78
4.77
4.53
4.25
4.22
3.67
3.65
3.56
3.55
3.55
3.54
3.48
3.44
3.41
3.34
3.33
3.17
3.15
3.03
3.00
2.98
2.85
2.80
2.77
2.77
2.76
2.72
2.61
2.58
2.54
2.54
2.54
2.50
2.49
2.49
2.43
2.39
2.37
2.29
2.20
2.19
2.14
2.12
2.07
2.05
2.00
1.43

Methodology
This study analyzes 961,773 purchase, refinance, and home improvement loans made in 2004 by Wells
Fargo Bank, Wells Fargo Home Mortgage, Wells Fargo Financial, Wells Fargo Funding, Wells Fargo
Joint Venture, and Wells Fargo Mortgage Venture.
The information was obtained through the Home Mortgage Disclosure Act (HMDA) which requires
depository and lending institutions to report the number and type of loans correlated by the race, gender,
income, and census tract of the applicants, and the disposition of those applications, in each Metropolitan
Statistical Area (MSA) where loans are originated.
For the first time, the 2004 lending data available under HMDA includes information regarding the
Annual Percentage Rate (APR) for individual loans. APR information is available for high-cost or
subprime loans, which are defined as first mortgages with an APR at least 3 points above the Treasury
rate and second mortgages with an APR at least 5 points above the Treasury rate. On average for 2004,
this meant first mortgages with APRs above 8% and second mortgages with APRs above 10%. At todays
Treasury rate of 4.53 on a 30-year bond, a high cost loan would have an APR above 7.53% on a first
mortgage or 9.53% on a second mortgage.
Applicants with Hispanic or Latino ethnicity were counted only as Hispanic or Latino and not counted in
the data for race. For example, someone who was considered Latino ethnicity but Black race was counted
only as Latino in our calculations and not counted as African-American.

An Analysis of Wells Fargos Lending Reforms
In 2003, ACORN launched a national campaign to shed light on Wells Fargos abusive lending, to force
them to change their predatory practices, and to win some compensation for the borrowers they had
harmed.
Although Wells Fargo has consistently denied that they engage in predatory lending or that there was
anything wrong with their practices, they have gradually been making the changes that ACORN
demanded, including some that were just announced on August 30, 2005.
However, even with the most recent changes, there are still large areas that Wells Fargo has not
addressed, and for every practice the company says they are changing, there are thousands of innocent
borrowers who have been harmed by that practice and whom Wells Fargo should compensate.
Points and Fees
When ACORN began its campaign, Wells Fargo Financials standard practice was to charge every
borrower 10% of the loan in discount points. They reduced this to 7%, then 5%, and then last year to the
4% it is at now.
Wells Fargos recent announcement does not change at all the amount charged for points and fees, despite
the companys intention to portray it as such.
Wells announcement reads nonprime lending customers will be charged origination fees limited to a
maximum of $1,500 . . . Customers will have the choice to buy down the interest rate of their home loan
by paying bona fide discount points.
Wells has always maintained that the discount points charged by Wells Fargo Financial be it 10, 7, 5, or
4 points are bona fide, and so it follows that the company will continue to charge the 4 points that has
been their current practice.
Further, right now Wells Fargo Financial does not charge any origination fees outside of the discount
points, so the $1,500 cap is irrelevant.
Prepayment Penalties
When ACORN began its campaign, Wells Fargos prepayment penalties were in effect for the first five
years of the loan and cost the borrower six months interest. Wells Fargo then reduced the length of time
to three years.
In the most recent announcement, Wells adopted the practice that ACORN announced with Citibank last
fall -- a 3 percent penalty during the first year of the loan, 2 percent in the second year, and 1 percent in
the third year.

Wells Fargos reduced prepayment penalties for future borrowers does not change the millions of dollars
in equity that Wells Fargo has already stripped from homeowners who were forced to pay an unfair
prepayment penalty, often just to get the interest rate that their credit warranted in the first place.
Prime Loans for Prime Borrowers
From the beginning of our campaign, ACORN charged that Wells Fargo routinely put prime borrowers
into expensive subprime loans. In response to these charges and despite evidence showing otherwise,
Wells Fargo maintained that only subprime borrowers got loans from Wells Fargo Financial.
ACORN also charged that this practice had the most severe impact on low-income and minority
communities, whose limited assets are being siphoned off. In addition to the racial lending data included
in this report, a study we released earlier this year found that the higher cost, or subprime, loans made
by Wells Fargo Financial are unequally concentrated in lower-income and minority neighborhoods, in
stark contrast to Wells Fargo Home Mortgages lower rate, or prime, loans which are concentrated in
upper-income and white neighborhoods. One out of every five of the mortgages made by Wells Fargo
Financial was in a minority neighborhood compared to just one out of every twenty mortgages made by
Wells Fargo Home Mortgage, the prime lender.
Now, Wells Fargo has announced an improvement for a problem they denied even existed. Given the
companys blatant lies on this subject, to the media and to state Attorney Generals, there is no reason to
trust that the company will implement this policy adequately. This, along with other practice reforms,
must be made permanent and enforceable by Court order. Otherwise, Wells could revert to its old ways
of doing business.
The prime borrowers who Wells Fargo overcharged must be compensated for the excess interest and fees
that they were charged.
Inaccurate Reporting to Credit Bureaus
Rather than reporting the actual loan size to the credit bureaus, Wells Fargo routinely reported the loan
size as the total of all the payments the borrower would make over the life of the loan, including interest.
The balance was similarly reported as the total of the remaining payments the borrower would make. This
served several purposes designed to prevent homeowners from refinancing out of their high interest Wells
loan.
It appears that since the start of our campaign Wells Fargo has changed this practice and now reports the
actual loan balance to the credit bureaus. However, Wells has not made an official statement regarding
this practice.
Misleading and Deceptive Sales Tactics
Loan Optimizer: Until recently, Wells Fargo used a very deceptive form called the Loan Optimizer to
convince borrowers of the benefits of refinancing with Wells Fargo. The form deliberately hid from the
borrowers the thousands of dollars they would be charged in discount points. In addition, the form was

used to sell the customer on the amount of interest they would save over the life of the loan with their new
Wells Fargo mortgage, but did not mention that their mortgage would have an adjustable interest rate,
which would affect those savings. Wells Fargo has since changed these parts of the form, but it is unclear
how many thousands of borrowers Wells Fargo tricked into refinancing through the use of this tactic.
Single Premium Credit Insurance
Wells Fargo continued to finance thousands of dollars of single premium credit insurance into their
mortgages, long after other lenders announced that they stopped this practice and both Fannie Mae and
Freddie Mac vowed they would no longer buy loans which included this insurance. Wells Fargo finally
eliminated single premium credit insurance in their mortgages when new federal regulations went into
effect which would count the financing of these insurance policies toward the calculation of points and
fees for HOEPA purposes. However, Wells Fargo continued to include single premium insurance in their
non-real estate loans.
Call Provisions
Wells Fargo Financial used to include call provisions in its mortgages, allowing Wells Fargo to demand
full payment on the mortgage even if it was before the end of the loan term and the borrower had been
paying on time. Wells Fargos August 30 announcement stated that the companys loans do not include
call provisions, but it is unclear when they made this change.
Additional Lending Practices that Wells Fargo Must Change
There are a number of other problems at Wells Fargo, which the company has still not addressed. This
includes the following:
Wells Fargo increases a borrowers loan amount and reaps additional profits by packing loans with
useless but expensive products such as the Home and Auto Security Plan which can cost a borrower over
$2,000 and which is financed into their high interest loan.
Wells Fargo Financial continues to solicit customers for its higher interest loans by mailing live checks
to homeowners in lower income and minority neighborhoods. The checks are sent as part of a targeted
marketing strategy in which immediately after the homeowner cashes or deposits the check, and thereby
enters into a loan with Wells, a loan officer runs a credit report and can view the homeowners debts and
monthly payments. The loan officer then calls the homeowner with a pitch to refinance and consolidate
their debt.
At their loan closing, many customers have been given an unsolicited Home Equity Line of Credit. In
some cases this was in the form of a credit card, which borrowers did not realize was secured by their
home. In other cases, borrowers have not even been aware of the existence of this second mortgage.
Wells Fargo Financial also secures their mortgages with the borrowers car in addition to the home,
and this is not due to high loan-to-values. Rather, this practice has two effects. First, it makes it easier for
Wells Fargo to collect on their mortgage. If a homeowner is behind on their payment, Wells Fargo can

threaten to repossess their car, and rather than waiting for the entire foreclosure process, Wells can take
the car on a much shorter timeline. Secondly, if the homeowner wants to sell their car, they have to get
Wells Fargo to release the title to it. When the homeowner contacts Wells, the company can solicit them
about financing their new car.
Wells Fargo misleads borrowers about adjustable interest rates. Borrowers are often led to believe
they are receiving fixed interest rates when their loans actually contain a variable rate, which can often
only go up. Wells Fargo Financial loans frequently contain variable interest rates that might start at 11%,
which would also be the floor or the lowest the rate can ever go and have a ceiling of 17%.
Structuring the loan with a variable interest rate also let Wells Fargo Financial avoid restrictions in state
law on the length or amount of prepayment penalties until an Office of Thrift Supervision ruling put an
end to this.
Wells Fargo also disguises a borrowers actual monthly payment by hiding the cost of taxes and
insurance. Wells borrowers are frequently led to believe that the monthly payments they are quoted will
take care of property taxes and homeowners insurance (like most of their previous mortgages). In other
cases, they are simply quoted a monthly payment, and believe it is comparable to their previous monthly
payment, when in fact the new figure does not include these charges, but they are never informed of the
difference. Not paying property taxes can lead to foreclosure or future refinances to pay off overdue
amounts; not paying insurance obviously leaves families vulnerable to a worst-case scenario where their
house burns down and they have no insurance coverage.
ACORN, the Association of Community Organizations for Reform Now, is the nation's largest
community organization of low- and moderate-income families, with over 150,000 member families
organized into 700 neighborhood chapters in 60 cities across the country. Since 1970 ACORN has taken
action and won victories on issues of concern to our members. ACORNs priorities include: better
housing for first time homebuyers and tenants, living wages for low-wage workers, more investment in
our communities from banks and governments, and better public schools. ACORN achieve these goals by
building community organizations that have the power to win changes -- through direct action,
negotiation, legislation, and voter participation. ACORNs website is at www.acorn.org.
739 8th St. SE

Washington, DC 20003
(202) 547-2500
acorn@acorn.org
ACORN Financial Justice Center

757 Raymond Ave., #200
St. Paul, MN 55114
(651) 644-5061
financialjustice@acorn.org
1024 Elysian Fields Ave

New Orleans, LA 70117
(504) 943-0044
acorn@acorn.org

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A Case of Black and White:

Racial Inequalities in Wells Fargos

A Case of Black and White:

- Wells Fargos Lending By State

- Wells Fargos Lending By Metropolitan Areas

An Analysis of Wells Fargo Lending Reforms

The Association of Community Organizations for Reform Now ACORN Report

A Case of Black and White:

The Association of Community Organizations for Reform Now ACORN Report

A Case of Black and White:

The Association of Community Organizations for Reform Now ACORN Report

A Case of Black and White:

The Association of Community Organizations for Reform Now ACORN Report

A Case of Black and White:

Wells Fargo Bank and Wells Fargo Home

All Wells Fargo Lending Companies

Percentage of Subprime Loans for Wells Fargo

WF Bank and WF Home

The Association of Community Organizations for Reform Now ACORN Report

A Case of Black and White:

Wells Fargo Bank and Wells Fargo Home

All Wells Fargo Lending Companies

The Association of Community Organizations for Reform Now ACORN Report

A Case of Black and White:

Percentage of Wells Fargo

Percentage of Wells Fargo

The Association of Community Organizations for Reform Now ACORN Report

A Case of Black and White:

All of Wells Fargos Companies Lending in the States with the

The Association of Community Organizations for Reform Now ACORN Report

A Case of Black and White:

The Association of Community Organizations for Reform Now ACORN Report 10

A Case of Black and White:

The Association of Community Organizations for Reform Now ACORN Report 11

A Case of Black and White:

The Association of Community Organizations for Reform Now ACORN Report 12

A Case of Black and White:

The Association of Community Organizations for Reform Now ACORN Report 13

A Case of Black and White:

Greatest Disparity Between African-American Share of Prime and Subprime Loans

The Association of Community Organizations for Reform Now ACORN Report 14

A Case of Black and White:

Disparity Between African-American Share of Prime and Subprime Loans

Disparity Between Share

The Association of Community Organizations for Reform Now ACORN Report 15

A Case of Black and White:

A Case of Black and White:

The Association of Community Organizations for Reform Now ACORN Report 17

A Case of Black and White:

The Association of Community Organizations for Reform Now ACORN Report 18

A Case of Black and White:

The Association of Community Organizations for Reform Now ACORN Report 19

A Case of Black and White:

The Association of Community Organizations for Reform Now ACORN Report 20

A Case of Black and White:

All Wells Fargo Lending Companies

Disparity Between LATINO

The Association of Community Organizations for Reform Now ACORN Report 21

A Case of Black and White:

Greatest Disparity Between African-American Share of Prime and Subprime Loans

The Association of Community Organizations for Reform Now ACORN Report 22

A Case of Black and White:

Disparity Between Share

(2005) A Case of Black and White - Inequalities in Wells Fargo's Lending

(2005) A Case of Black and White - Inequalities in Wells Fargo's Lending