BALTIMORE — Black neighborhoods in Baltimore were disproportionately damaged by the subprime mortgage fallout, according to a federal lawsuit filed by the city, which is attempting to recoup the costs of maintaining neighborhoods wracked by foreclosures.

The suit alleges Wells Fargo Bank N.A. engaged in a pattern of predatory lending practices in Baltimore’s poorest neighborhoods, leading to foreclosure rates nearly double the citywide average.

The lawsuit alleges that San Francisco-based Wells Fargo targeted black neighborhoods by using reverse redlining, which is prohibited under the federal Fair Housing Act. For example, it claims that mortgages for homes worth $75,000 or less — most of which are located in black neighborhoods — had higher rates and were laden with fees and surcharges.

Wells Fargo does not comment on pending litigation, but spokeswoman Debora Blume said in a statement that the company does not consider race when making loans.

Home sales predicted to recover in second half

WASHINGTON — A trade group for real estate agents predicted Tuesday that the pace of U.S. home sales will pick up significantly in the second half of 2008, bringing total sales for the year marginally higher than in 2007.

The monthly forecast from the National Association of Realtors calls for U.S. existing home sales to increase 0.9 percent this year to 5.7 million, up from a projected 5.65 million last year.

Final results for U.S. existing home sales in 2007 — to be released later this month — are expected to be down 12.7 percent from 6.48 million in 2006, the group said.

Some economists, however, are much more pessimistic about the housing market this year and are predicting far lower home sales.

The group did not anticipate 2007’s severe housing market downturn. A year ago, it was predicting more than 6.4 million existing home sales — about 760,000 more than actually happened.

— From news wires