(Reuters) - Baltimore has filed a new lawsuit accusing Wells Fargo & Co of steering black borrowers into expensive mortgages only to later foreclose on hundreds of homes, costing the city property tax revenue and forcing it to spend more to maintain the public's safety.
"Wells Fargo's discriminatory practices, and the resulting unnecessary foreclosures in the city's minority neighborhoods, have inflicted significant, direct, and continuing financial harm on Baltimore," the city said in a 107-page complaint filed Wednesday in Baltimore federal court.
The city filed its complaint on the same day Wells Fargo said it will let the National Association for the Advancement of Colored People review its lending practices, to settle a predatory lending lawsuit brought by the civil rights group.
Based in San Francisco, Wells Fargo is the largest U.S. mortgage lender and the fourth-largest U.S. bank by assets, regulatory filings show.
Baltimore's latest filing came three months after U.S. District Judge J. Frederick Motz dismissed its earlier complaint as too broad. He gave the city permission to sue over specific houses and neighborhoods where it believed damages might be traceable to specific Wells Fargo lending practices.
George Nilson, the city solicitor for Baltimore, was not immediately available for comment. Wells Fargo did not immediately return requests for comment, but has long defended its mortgage lending practices as fair and not discriminatory.
When it sued Wells Fargo in 2008, Baltimore became the first major American city to accuse a mortgage lender of violating the federal Fair Housing Act with predatory lending practices that exacerbated the nation's housing slump.
In its amended complaint, the city identified specific expenses it said it incurred because of Wells Fargo foreclosures, including costs for inspections, condemnations and boarding up homes, and increased police and fire costs.
Baltimore also said it has lost property tax revenue both from foreclosed homes, and from homes whose values fell because of large concentrations of nearby Wells Fargo foreclosures.
The NAACP said it is still suing 14 other lenders, including Citigroup Inc, HSBC Holdings Plc and JPMorgan Chase & Co.
The Baltimore case is Mayor & City Council of Baltimore v. Wells Fargo Bank NA et al, U.S. District Court, District of Maryland, No. 08-00062.
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