Wells Fargo & Co. and its subsidiary Wells Fargo Financial were named today in a lawsuit that accuses the financial company of engaging in predatory lending of sub-prime mortgages and equity loans to low-income borrowers.

The suit, filed on behalf of the Association of Community Organizations for Reform Now, alleges Wells Fargo engages in a “bait-and-switch” plan that solicits targeted homeowners to refinance their debt on more favorable terms. According to the suit, however, the borrowers are presented at closing with terms different than those initially offered, including higher points and higher interest rates.

The suit also alleges Wells Fargo failed to inform borrowers with good credit that they could qualify for loans on better terms than those offered by Wells Fargo Financial.

In a statement, Mark Oman, group EVP of home and consumer finance for Wells Fargo, said the company had not yet seen the lawsuit, but that the group has taken facts about Wells Fargo Financial’s customer relationships out of context to paint a misleading picture. He said the allegations “are false and totally contrary to our ethical standards and business practices.”

“It’s very simple,” Oman said. “We do not tolerate any attempt to sell a customer any product or service unless the terms are fully disclosed. We do not lend to customers unless we believe they can make loan payments, period. The credit we extend must product demonstrable benefits for customers, such as reducing their interest rate or monthly payment, their total amount of payments or helping correct a delinquency on a previous real estate-secured loan.”

ACORN is made up of low- and moderate-income families across the country.


Send tips or a Letter to the Editor to samantha@inman.com or call (510) 658-9252, ext. 140.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Inman Connect is LIVE tomorrow! Join us and thousands of your peers from wherever you are.Register Today×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription