Cleveland sues banks over foreclosures

"CLEVELAND—The city of
Cleveland, an epicenter of the nation's home foreclosure crisis, has
sued 21 banks and claimed their subprime lending practices created a
public nuisance that hurt property values and city tax collections.

The
lawsuit was filed Thursday in Cuyahoga County Common Pleas Court, and
seeks to recover hundreds of millions of dollars in damages, including
lost taxes from devalued property and money spent demolishing and
boarding up thousands of abandoned houses.

Cleveland Mayor
Frank Jackson said Friday that the buying and selling of high-interest
mortgages by some of the nation's biggest banks had devastated city
neighborhoods struggling to recover after the loss of manufacturing
jobs.

"We have to hold accountable those who are responsible," Jackson said at a City Hall news conference."

http://origin.mercurynews.com/breakingnews/ci_7944557?nclick_check=1

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and to lend to more people that were not credit worthy.
Foreclosures are a natural consequence of these flimsy lending standards

Wait. The government forced lenders to package their mortgages into SIV's and sell them to investors for billions of dollars? And then the government woke up one morning in 2005 and changed the bankruptcy laws so lenders who charge 25% interest on their credit cards for missing a payment could get their money back without fear of anyone being able to declare bankruptcy? All without any lobbying by these same lenders? That is simply amazing! And here I was thinking that it was the brainchild of greedy ass CEO's like Citi's Charles Prince who walks away from his mess with a multi-million dollar severance package. I am so naive.

I spent several years as an internal staff auditor for MidAm Bank, which became SkyBank and just was recently purchased by Huntington. The loan document verification standards, such as employment and income verification, and the percentage of income to debt minimum ratio in place during that time would never have allowed this large number of defaults to occur. The mortgage lending department tore apart any default file looking for flaws or missed verification steps. MidAm/Sky/Huntington recently took a big write off to their reserves for loan loss account resulting in a huge drop in profitability and stock price. This loss was the result of a subprime lending subsidiary apparently not performing due diligence. I can only conclude that the early profits from subprime lending led to lax standards and corporate greed, rather than the well run conservative institution I knew when Ed Reiter was at the helm. Every bank employee with bank stock in their 401k has suffered a devastating loss.

"...Our suit alleged that ANB discriminated on the basis of national origin in one of its credit card programs by: (1) requiring higher credit scores for those applicants who applied on a Spanish-language application form; (2) offering lower credit limits to those Spanish-language applicants who were approved; and (3) failing to offer certain favorable credit promotions to Spanish-language account holders. ANB filed a motion for summary judgment contending, among other things, that its policy of excluding Hispanic designated accounts from its benefits programs is not covered by the ECOA..."

In other words, Associates National Bank was sued because they did not automatically offering favorible credit promotions to hispanic Americans.

http://www.usdoj.gov/crt/housing/documents/ecoa2000.htm

So, NOT giving loans to minorities gets YOU SUED.
And THAT WAS IN 1999. Why didn't Bubba Clinton DO ANYTHING ABOUT THE SUB-PRIME MESS TARGETING MINORITIES!?!?!?!

Don't blame me,
I didn't vote for a
socialist.

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