As she describes it, Beth Jacobson and her fellow loan officers at Wells Fargo Bank “went on the diligence of hell” for a decade, consistently singling out blacks in Baltimore and suburban Maryland for mortgage loans at. high risk.

The loans, Baltimore officials have claimed in a federal lawsuit against Wells Fargo, have thrown hundreds of homeowners into foreclosure and cost the city tens of millions of dollars in taxes and city services.

Wells Fargo, Ms Jacobson said in an interview, viewed the black community as fertile ground for subprime mortgages, as working-class blacks were hungry to be part of the mania to own a home in the country. Loan officers, she said, pushed clients who might have qualified for prime loans into subprime mortgages. Another loan officer said in an affidavit filed last week that employees called black people “mud people” and subprime loans “ghetto loans.”

“We went right after them,” said Ms. Jacobson, who is white and said she was once the main head of the bank’s subprime lending nationwide. “Wells Fargo Mortgage had an emerging markets unit that specifically targeted black churches because it believed church leaders had a lot of influence and could convince worshipers to take out subprime loans.

Ms Jacobson’s account and that of the other loan officer who gave an affidavit, Tony Paschal, both of whom left Wells Fargo, provide the first detailed accusations of deliberate racial steering into subprime mortgages by one of the biggest banks across the country.

According to Baltimore officials, the consequences of these policies are dire. Data released by the city in connection with the lawsuit last week shows that more than half of the properties subject to foreclosure on a 2005-2008 Wells Fargo loan are now vacant. And 71% of them are in predominantly black neighborhoods.

Federal District Court Judge Benson E. Legg had asked the city to file the additional documents and has not decided whether the trial can go ahead.

Wells Fargo officials have declined detailed talks since Baltimore filed a lawsuit in January 2008. In an emailed statement Friday, a spokesperson said only 1% of the city’s 33,000 foreclosures were attributable to Wells Fargo mortgages.

CreditMatt Roth for the New York Times

“We have worked extremely hard to make homeownership possible for more African American borrowers,” wrote Kevin Waetke, a spokesperson for Wells Fargo Home Mortgage. “We absolutely do not tolerate team members treating our clients or others in a disrespectful or unfair manner, or violating our ethics and lending practices.”

City and state officials across the country have investigated and at times sued Wells Fargo for its practices. The Illinois attorney general investigated whether Wells Fargo Financial violated fair loan and civil rights laws by directing black and Latino homeowners to high-interest loans. New York Attorney General Andrew M. Cuomo has raised similar questions about the lending practices of Wells Fargo, JPMorgan Chase and Citigroup, among other banks.

The NAACP has filed a class action lawsuit for systematic racial discrimination by more than a dozen banks, including Wells Fargo.

At the heart of these fees is reverse redlining, particularly the marketing of the most expensive and expensive loan products to black customers.

The New York Times, in a recent analysis of mortgages in New York, found that black households earning more than $ 68,000 a year were nearly five times more likely to hold high-interest mortgages than white people. similar or even lower income. (The disparity was greater for Wells Fargo borrowers, as 2% of whites in this income group have subprime loans and 16.1% of blacks.)

“We know that African Americans and Latinos get subprime loans while whites with the same credit profile get lower cost loans,” said Eric Halperin, director of the Washington office of the Center for Responsible Lending. “The question is why, and the gory details of this complaint may provide an answer.”

The affidavits of the two loan officers appear to strengthen the Baltimore lawsuit. Mr. Paschal, who is black and worked as a loan officer in the Wells Fargo office in Annandale, Virginia from 1997 to 2007, offers a sort of introduction to Wells Fargo’s subprime marketing strategy by race.

In 2001, he states in his affidavit, Wells Fargo created a unit in the Mid-Atlantic to push expensive refinance loans on black customers, especially those living in Baltimore, in Southeast Washington. and in Prince George County, Maryland.

“They called the subprime loans in minority communities ghetto loans and minority clients as ‘these people have bad credit’, ‘these people don’t pay their bills’ and ‘mud people’,” he said. Mr. Paschal stated in his affidavit.

He said a bank office in Silver Spring, Md., Had an “affinity group marketing” section, which hired black people to appeal to African American churches.

Credit…Matt Roth for The New York Times

“The company has put ‘premiums’ on minority borrowers,” Paschal said. “By that I mean loan officers were given cash incentives to aggressively market subprime loans in minority communities.

The two loan officers said the bank gave bonuses to loan officers who referred borrowers who should have qualified for a prime loan to the subprime division. Ms Jacobson said she made $ 700,000 a year and the company transported her and other subprime agents to resorts across the country.

“I used to joke, ‘I’ll pay for your kids to go to private school if you give me clients,’” Ms. Jacobson said in the interview.

Loan officers used other methods to direct clients to subprime loans, according to the affidavits. Some agents told the underwriting department that their customers, even those with good credit scores, were unwilling to provide income documentation.

“By doing this, the loan went from prime to subprime,” Ms. Jacobson said. “But it was not necessary; many of these clients had W2 forms. “

Other times, she says, loan officers would cut and paste one applicant’s credit reports at the request of another client.

These practices have had a tremendous impact on customers. For a homeowner who takes out a mortgage loan of $ 165,000, a difference of three percentage points in the loan rate ?? a typical gap between conventional and subprime loans ?? adds over $ 100,000 in interest payments.

The charges in the affidavits, which were given to Relman & Dane, a civil rights law firm working with the city of Baltimore, did not elicit a specific response from Wells Fargo. But city officials say the conclusion is clear.

“They confirm our worst fears: that this is not just a case based on a review of the numbers and statistical analysis,” said city attorney George Nilson. “You don’t have to scratch your head and wonder if maybe it was just an accident. The behavior is pretty self-explanatory. “

Both sides plan to appear in court at a hearing into the case at the end of June.

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