Posted on 08/08/2017 7:11:41 AM PDT by Oldeconomybuyer
A federal judge in San Francisco has refused to dismiss a lawsuit accusing Wells Fargo bank of denying loans to immigrants who came to the U.S. as youngsters and have been allowed to remain here.
Denial of loans based on citizenship status violates a federal law, passed in 1870, and a California civil rights law, U.S. District Judge Maxine Chesney said Thursday in rejecting the bank’s attempt to dismiss the proposed nationwide class-action suit.
Wells Fargo, according to the suit, has a policy of granting loans only to U.S. citizens or to noncitizens who have become permanent legal residents and have a cosigner who is a U.S. citizen.
The plaintiffs are among more than 750,000 immigrants who entered the United States before age 16. The program is called Deferred Action for Childhood Arrivals, or DACA, and has an uncertain future under President Trump.
“This is a very significant ruling,” said attorney Victor Viramontes of the Mexican American Legal Defense and Educational Fund, a lawyer for the plaintiffs. “Wells Fargo argued that they could discriminate against DACA recipients, and the judge rejected that.”
Viramontes said other national banks have similar policies. “The entire industry should take note of this ruling and how they are treating people who are not yet permanent lawful residents,” he said.
(Excerpt) Read more at sfgate.com ...
Banks grant loans based upon the probability that the borrower will actually repay the loan.
Judge Phil Spector believes they should grant them based upon shut up.
If the loan goes into default and the bank still owns the mortgage, the bank can take back the property. That is clearly less desirable than an orderly repayment of the loan, particularly if the buyer is upside down on the loan when deported. But the mortgages are usually sold in the first few months and are no longer the bank's problem. They are someone else's problem.
Still, prudent underwriting practices should deny such loans to those who might be deported unless the banks can charge a higher rate of interest to compensate for the higher level of risk associated with the loan.
BTT
....Denial of loans based on citizenship status violates a federal law....
These denials aren’t based on whether or not a person is a citizen. It is a factor based on whether or not the applicant can always remain in the USA legally and thus has the ability to repay the loan completely. That ability is questionable. That is a factor no different than employment, amount of income, or a credit score.
So you need to loan money to someone who could be deported?
I would think that the loan application would require your name, address, and a valid SOCIAL SECURITY NUMBER. How can a non-citizen ever posses a valid SSN? Why can’t WF just say, “Please come back when you have a valid SSN assigned to you by the U S government?”
If this is a law from 1870 that forces banks to loan to illegal aliens, our government has always been crazy. How are you going to collect loan payments from them if they are deported? This is an old law that no doubt was meant to help legal immigrants who were discriminated against by bankers, and it shouldn’t apply to those who are not citizens.
So what does this 1870 law really state? I’m not ready to just accept her interpretation without further study.
Agree.
“Wells Fargo, according to the suit, has a policy of granting loans only to U.S. citizens or to noncitizens who have become permanent legal residents and have a cosigner who is a U.S. citizen.”
Seems entirely reasonable to me.
And notice that WF’s policy is that even permanent residents have to have a co-signer who is a citizen to qualify.
This is not unlike what happened in 2007 with the housing crash. Our niece moved to Sonoma, CA and bought a home there out of foreclosure, The “Mexican owners” had defaulted on their $750,000 “investment,” and she bought the place for about $350k. It was a nice home with a pool, but the five Mexican families that had owned it, had put up walls in the living and dining rooms cut additional windows but had not made them weatherproof to accommodate all the inhabitants and the walls were so filthy that I had to spray the entire inside with a coat of white primer because they were not cleanable by normal means. I can honestly say I’ve never seen such a nice home trashed so badly. I could write a tome about the other devastation I found. So I’m with WF on their policy, because this is how their debt would likely be repaid.
“It’s the only good thing I’ve heard about Wells Fargo.”
They must really be taking it in the shorts with all the Illegal Aliens and their anchor babies (”Dreamers”) fleeing to Canada and Mexico to avoid apprehension and defaulting on their loans to cause such a u-turn in corporate policy.
W-F and BOA were the ones I remember starting it all by giving illegals bank accounts and loans back in 2000.
SS1
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