In the run-up to the housing collapse, mortgage banks were not only offering unsustainable deals but actively prospecting for victims in poor and minority neighborhoods. In a federal lawsuit, Baltimore officials charged Wells Fargo with targeting black neighborhoods for so-called ghetto loans. The bank’s “emerging markets” unit, according to a former bank loan officer, Beth Jacobson, focused on black churches. The idea was that trusted pastors would steer their congregants toward loans. These turned out to be subprime loans carrying the highest interest rates.
