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VOL. 125 | NO. 25 | Monday, February 8, 2010

Adversarial

Attys. suing Wells Fargo to square off against Feibelman

By Andy Meek

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Webb Brewer, left, and Steve Barlow of Brewer & Barlow PLC, address a meeting of the Memphis Responsible Lending Cooperative on Thursday. The duo is suing Wells Fargo for faulty lending. Photo: Lance Murphey

Both sides in the federal lawsuit Memphis and Shelby County have filed against Wells Fargo are beginning to strap on their armor.

The San Francisco-based financial services giant – one of the largest U.S. banks by assets – has hired Memphis attorney Jef Feibelman of Burch, Porter & Johnson PLLC.

He’ll be defending Wells Fargo against allegations in a more than 50-page complaint both local governments filed at the end of December.

The main contention of the city-county action is that Wells Fargo peddled predatory loans to black borrowers. Partly because those claims involve a complicated web of issues and reams of data, Feibelman has asked the court for more time to respond to the suit.

An answer from Wells Fargo was due by Feb. 1. The lender now has until April 19, and the city and county then will have until June 18 to answer Wells Fargo’s response.

A Wells Fargo spokesman said the company had no comment. Feibelman also declined to comment about the still-preliminary court action, which both sides have said they expect to take a long time to work through.

A worthy opponent

Feibelman, whose practice areas include commercial and business litigation, employment law and intellectual property, was one of three finalists the Tennessee Supreme Court considered in 2006 for state attorney general. The job ultimately went to current AG Bob Cooper.

Feibelman also reportedly was on the short list of candidates whose names have been floated for the vacant position of U.S. attorney for West Tennessee.

Feibelman showed up Thursday afternoon at a meeting of the Responsible Lending Collaborative, an initiative of the RISE (Responsibility, Initiative, Solutions, Empowerment) Foundation. The featured guests included the Memphis attorneys who will be his adversaries over Wells Fargo – Steve Barlow and Webb Brewer.

The city and county have tapped a Washington-based firm that’s also suing Wells Fargo in Baltimore over the same alleged lending practices and their contribution to foreclosures there.

Barlow and Brewer are working in tandem here with that firm, Relman & Dane.

In general terms

At the collaborative’s meeting, Brewer stood before a roomful of people who represent banks, small businesses, nonprofits and government agencies. He originally planned to bring everyone up to speed on the lawsuit, but instead kept his cards close to the vest.Feibelman was sitting a few feet away.

Jef Feibelman of Burch, Porter & Johnson PLLC is the local attorney representing Wells Fargo in the city-county lawsuit against Wells Fargo. The suit alleges that Wells Fargo targeted minority communities for bad loans. Photo: Lance Murphey

Feibelman had already sat through a presentation by Barlow about the economic devastation caused by urban blight and decay. As part of the legal work he’s pursued for years, Barlow has pushed behind the scenes to get state lawmakers to put more teeth in enforcement statutes that target slipshod property owners.

Brewer, the former director of advocacy for Memphis Area Legal Services, followed with brief remarks about Wells Fargo.

“I was going to talk to you about all the evidence we’ve uncovered and details of our litigation strategy, but I’ll save that for another day,” Brewer said, drawing a round of laughter when it became clear he was referring to Feibelman.

Brewer went on to say attorneys working for the city and county – where the foreclosure problem is hitting hardest in inner-city neighborhoods like Frayser and Hickory Hill – are gearing up for an arduous legal battle with Wells Fargo.

The lending company, which was founded in the 1850s, today has $1.2 trillion in assets, more than 70 million customers and stock that had a market value of $132 billion as of Sept. 30. Wells Fargo’s mortgage division serves all 50 states with more than 2,200 mortgage and Wells Fargo bank stores and had mortgage originations by the end of 2008 of $288.47 billion, according to the company.

‘Big fish’

While in Washington a few weeks ago, Memphis Mayor A C Wharton Jr. paid a visit to Tom Perez, the assistant U.S. attorney general who heads the U.S. Justice Department’s civil rights division. The mayor laid out for him the city’s case against Wells Fargo.

Wharton also talked with Perez in broader terms about mortgage lending issues that are loosely connected to the suit, such as the federal government’s effort to push for loan modifications.

“The existing loan modification program isn’t working,” Wharton said he told Perez. “I was able to make that point clear. With respect to the underlying urgency of our lawsuit here, that same message was driven home resoundingly.”

Brewer ticked off some of the major reasons the city and county decided to go to court.

“What we allege is Wells Fargo targeted minority areas for loans, and that’s caused blight that’s costing the city money,” Brewer said. “It causes a definite drain. One goal is to try and put a tourniquet on the number of foreclosures that are happening.”

Wrapping up, he added: “We’ve got a big fish to wrestle with.”

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 76 133 1,342
MORTGAGES 83 131 1,047
FORECLOSURE NOTICES 0 11 162
BUILDING PERMITS 0 87 2,838
BANKRUPTCIES 39 73 691
BUSINESS LICENSES 0 10 286
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0