Black Borrowers Unable|to Prove Biased Lending

(CN) – The 3rd Circuit rejected a claim that Wachovia Mortgage Corp. made it more difficult for black customers to get mortgages for homes in what one bank employee allegedly referred to as an “exclusive lily white community.”

     Tolano and Cathy Anderson, Richard and Brenda Wilkins, and Lloyd and Audria Wheatley purchased adjacent homes in the Silver Lake section of Dover, Del., in 2004.
     They later sued Wachovia for the conditions under which they obtained the mortgages, including extensive pre-sale repairs to the insulation, plumbing, drywall of the Anderson home; repairs to the roof, heating system and pipes of the Wheatley home, along with a certification from a roofing specialist on the day of the closing; and a challenge to the Wilkins’ use of a convenience check issued by their credit card company.
     As evidence that the conditions were racially motivated, Anderson quoted a Wachovia employee as saying, “There are a lot of people who are not happy with you all purchasing homes on Silver Lake. … Silver Lake is an exclusive lily white community and now here you guys come.”
     The federal appeals court in Philadelphia backed the lower court’s ruling for Wachovia.
     “Whether the plaintiffs have made out a prima facie case of discrimination is a close call, but even if they have, they have not undermined Wachovia’s legitimate reasons for imposing the conditions they did,” Judge Marjorie Rendell wrote.
     She also ruled that another Wachovia employee’s use of the phrase “you people” was not necessarily proof of racism.
     “Even if we were persuaded that the use of the phrase ‘you people’ in this context could constitute direct evidence, however, plaintiffs have not shown that Wachovia’s decision-makers … relied on plaintiffs’ race in imposing the challenged loan conditions,” Rendell added.

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