In the wake of federal justice officials’ landmark $175 million settlement with Wells Fargo, Prince George’s County leaders are concerned residents won’t receive their “fair share” of relief.
The U.S. Department of Justice announced July 12 its settlement with the San Francisco-based lender in regard to allegations of discriminatory lending practices, in which black and Hispanic borrowers who were qualified for better loans were forced into sub-prime loans from 2004 through 2009. In addition, Baltimore city reached a separate settlement with the bank for $7.5 million, filed the same day.
Despite the settlement, Wells Fargo claims no wrongdoing, saying in a statement the company “is settling this matter solely for the purpose of avoiding contested litigation with the DOJ.”
But Prince George’s County officials said they were concerned not enough of the national settlement money would go to county residents, given the county experienced one of the highest rates of foreclosures in the state during the Great Recession. The county accounted for about one-third of the state’s foreclosures during the height of the financial crisis.
Of the settlement amount, $125 million is slated to go toward borrowers nationwide who were wrongfully forced into to sub-prime home loans. Although it is unclear how many county residents might be included in that side of the settlement, a portion of the remaining $50 million — dedicated to assisting borrowers and homebuyers going forward primarily with down payments — will go to the Washington, D.C., “metropolitan statistical area,” which includes Prince George’s, according to the settlement agreement.
County Councilman Mel Franklin (D-Dist. 9) of Upper Marlboro said if the county does not receive “its fair share” through the federal settlement, it should pursue its own lawsuit against the bank.
“Baltimore city was able to negotiate its own $7.5 million settlement, and that’s great for city residents, but my concern is that county residents won’t do as well through the larger settlement,” Franklin said. “... We just don’t know the details of how much this settlement means for county residents. If it appears we’re not getting our fair share, I maintain that we should pursue our own legal action.”
Scott Peterson, a spokesman for County Executive Rushern L. Baker III (D), said in an email to The Gazette that county lawyers still are working to ascertain how the county will be affected by the settlement.
“Insufficient details of the settlement have been released to make a determination regarding the extent county residents will benefit from the agreement,” Peterson said. “The County will examine its options when we have more information regarding the settlement.”
County Councilman Obie Patterson (D-Dist. 8) of Fort Washington, who has worked on the foreclosure challenges since entering office in December 2010, said he hopes the settlement “sends a message” to banks that discriminatory practices will not be tolerated. Patterson echoed Franklin’s sentiment, saying the county needs to work quickly to determine whether residents will benefit from the federal settlement.
“I don’t know how you can have a case brought before the Justice Department and omit the county with the highest rate of foreclosures of any jurisdiction in the state,” Patterson said. “We need to do the research and figure out if we can be a part of [the federal settlement].”