PI Original Adam Doster Friday July 31st, 2009, 2:36pm

Madigan Targets Wells Fargo

During her tenure as attorney general, Lisa Madigan has worked vigorously to protect Illinois residents abused by deceptive mortgage lending practices and "mortgage rescue" scams.  Now she is taking on one of the nation's largest lenders, Wells Fargo, for allegedly ...

During her tenure as attorney general, Lisa Madigan has worked vigorously to protect Illinois residents abused by deceptive mortgage lending practices and "mortgage rescue" scams.  Now she is taking on one of the nation's largest lenders, Wells Fargo, for allegedly discriminating against black and Latino homeowners:

Attorney General Lisa Madigan filed the lawsuit against Wells Fargo & Co. Friday in Cook County Circuit Court.

The suit alleges that Wells Fargo sold the minorities high-cost subprime mortgage loans while white borrowers with similar incomes received lower-cost loans.

For some background on this issue, look no further than the recent Chicago Reporter series on Wells Fargo that we've previously highlighted. According to their data, 49 percent of loans received by Chicago African-Americans in 2007 were low-cost subprime mortgages. They were not distributed just to low-income borrowers either -- 34 percent of black borrowers earning $120,000 or more in annual income received subprime mortgages that year. By comparison, only 22 percent of white borrowers earning less than $40,000 annually received similar loans.

This isn't just an Illinois issue, either. In Baltimore, city officials filed a federal lawsuit claiming Wells Fargo dragged hundreds of Baltimore residents into foreclosure and cost the city tens of millions of dollars in taxes and city services.

The AP reports that Madigan will ask the court to rescind the contracts and grant "full restitution" to the exploited consumers.

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