The case actually started last winter when a local nonprofit called the Cleveland Housing and Renewal Project took Wells Fargo and Deutsche Bank to court. The nonprofit's attorneys wanted the global lenders to stop the sale of 36 trashed houses for pennies on the dollar to out of state investors. The Wells Fargo case ended up in mediation and somewhere along the way took a wrong turn. The nonprofit, now joined by the city of Cleveland, went back to court, asking city Housing Court Judge Raymond Pianka to stop Wells Fargo from selling all of its estimated 180 bank-owned Cleveland houses. On Wednesday, the judge partially agreed ruling that Wells Fargo must show the court proof that it has made some effort to fix up any house before selling it off. Frank Ford heads the nonprofit that filed the suit.
Frank Ford: This is a victory for any Cleveland homeowner that has to live next to a Wells Fargo house that is dragging down their property value.
The ruling does not apply for Wells Fargo houses for sale over $40,000. In court, Wells Fargo's attorneys argued the lender was not a landlord or rehabber and that if forced to fix up properties, it would have to "rethink all of it's business practices." In a statement, Wells Fargo said it believes the ruling has no legal basis and its attorneys are reviewing legal options, including an appeal.