Baltimore housing official Jason Hessler oversees a database of city housing code violations at vacant homes  and the costs of maintaining and fixing derelict properties. The running tab was among the evidence presented to convince a federal judge to continue the city’s housing discrimination lawsuit against Wells Fargo Bank.

The bank had asked U.S. District Judge Benson E. Legg to dismiss the city’s case, arguing that it lacked proof that Wells Fargo had discriminated against homeowners in predominantly African American neighborhoods by steering them into high-cost sub prime mortgages that were doomed to fail, resulting in hundreds of foreclosed homes and a loss in tax  revenue for the city government.

But Judge Legg denied the bank’s motion Thursday, saying the city had shown enough evidence of its charges to continue the case.

It was a victory for the city in its effort to hold the bank responsible for its role in the foreclosure crisis that has undermined Baltimore neighborhoods. Other cities where the California-based bank operates are interested in the outcome of the city’s case.

Judge Legg’s decision means the city should get access to Wells Fargo records and mortgage documents to help prove its allegations of reverse-redlining by the bank. Two former bank employees have already given damaging testimony, saying the bank targeted blacks for costly mortgages they couldn’t afford and rewarded employees for doing so. Judge Legg cited those statements in his ruling.

City and Wells Fargo lawyers now have to work on a plan to share bank records. But loan documents alone won’t be enough to prove the city’s liability and damage claims. Wells Fargo in a court hearing Monday showed that a handful of properties cited by the city were owned not by unsuspecting homeowners but by investors. The bank’s lawyers provided documents on 10 houses — examples cited by the city — that illustrated the reasons a property owner defaulted on a mortgage other than the terms of the loan: overextended credit, loss of a job, nonpayment of rent by a tenant, damage to the property and personal tragedy.

Wells Fargo also contends that its loans represent 1 percent of the city’s 33,000 foreclosures and that the city bears part of the responsibility for problems associated with vacant houses because it owns 9,000 of them.

The next hearing in the case is set for July 20.
BY ANN LOLORDO