- by Eli Segall, Staff
A Baltimore native who defaulted on a subprime loan has been awarded $1.25 million in damages from her lender, Wells Fargo Bank N.A. The case may lead to similar lawsuits nationwide, and also may help Baltimore City's suit against the bank, claiming it targeted minority neighborhoods with subprime loans, legal and banking experts say.
Kimberly L. Thomas was awarded $250,000 in damages and $1 million in punitive damages in Montgomery County Circuit Court July 31. A six-member jury convicted Wells Fargo of fraud, negligence and other charges for inflating Thomas' income and assets on her mortgage application, and locking her into a bigger loan than she had applied for -- one she couldn't afford.
Thomas, 41, said in an interview with the Baltimore Business Journal that her case "destroys the myth" that the subprime mortgage meltdown is fueled by homebuyers taking loans they can't handle.
"They make it seem like it's the person's fault," Thomas said from her Silver Spring townhouse. "But they don't know what's going on behind the scenes."
Brian Maul, her attorney, said Thomas' loan agent pushed through a bigger mortgage to reap a higher commission. Teri Schrettenbrunner, a Wells Fargo spokeswoman, said the bank followed "responsible lending practices" and will appeal the verdict. MORE