A Los Angeles Superior Court jury ruled against Wells Fargo (WFC: 31.54 +0.51%) Thursday in a mortgage discrimination case, awarding borrowers $3.5 million.
The class-action lawsuit alleged the bank knowingly discriminated against borrowers in minority neighborhoods. As a result, borrowers were charged more for their loans than those in predominately white areas of Los Angeles County, the court ruled.
The 880 borrowers participating in the class-action case will receive $4,000 each in damages. Plaintiffs originally asked for $24 million total for an original 7,000 plaintiffs. Those participating the class received first-lien mortgages of more than $150,000 between May 2002 and December 2005.
Plaintiffs alleged that in 2002, Wells introduced a computer program called "Loan Economics" that they said gave loan officers the ability to offer applicants lower pricing on a loan. However, branch managers in minority neighborhoods disallowed the use of the program.
Wells Fargo said in a statement Thursday that the program was an internal tool only that helped staff determine commission accounting, not loan pricing.
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