Wells Fargo & Co may be moving toward a settlement of Baltimore's lawsuit accusing it of steering minority borrowers to expensive home loans.

The fourth-largest U.S. bank has asked a federal judge in Baltimore to extend the city's deadline to file an amended complaint by four weeks to April 9.

Wells Fargo requested the extension so that it can meet with Baltimore to permit the parties to undertake substantive communications without the need for further litigation, lawyers for the San Francisco-based bank wrote on Thursday.

The city and Wells Fargo did not immediately respond to requests for comment.

Baltimore sued Wells Fargo two years ago, becoming the first major American city to accuse a mortgage lender of violating the federal Fair Housing Act with predatory lending practices that exacerbated the nation's housing slump.

Many lenders have been accused of steering minorities to costly mortgages, known as reverse red-lining. Baltimore had argued that Wells Fargo's lending practices led to lower property tax revenue, rising foreclosures and home vacancies, increased criminal activity, and higher police and fire costs.

U.S. District Judge J. Frederick Motz in January dismissed the city's suit, finding it not plausible to connect Wells Fargo's practices with claimed damages.

He allowed Baltimore to file a narrower complaint focused on houses or neighborhoods where damages might be more directly traceable to Wells Fargo.

The bank still faces a Memphis, Tennessee, lawsuit alleging Fair Housing Act violations. It was also sued by Illinois for alleged state law violations.

The Baltimore case is Mayor & City Council of Baltimore v. Wells Fargo Bank NA, U.S. District Court, District of Maryland, No. 08-00062.

(Reporting by Jonathan Stempel; editing by John Wallace)

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