Several Cities Take Foreclosure Litigation Back to the Banks

Last Friday Los Angeles filed a federal lawsuit against Chase for both redlining and reverse redlining in mortgage lending to minority borrowers.  In short, the city alleges claims for violation of the Fair Housing Act and  restitution, and seeks damages for tax revenue lost to the city as a result of these practices. 

"The lawsuit on Friday is part of the second most populous U.S. city's effort to hold mortgage lenders liable for lost property tax revenue caused by falling home values, and the cost to maintain vacant foreclosed properties.

"LA continues to suffer from the foreclosure crisis - from blight in our neighborhoods to diminished revenue for basic city services," City Attorney Mike Feuer said in a statement. "We're fighting to hold those we allege are responsible to account."

It said the New York-based bank's practices included redlining, where minority borrowers are denied credit on the same terms as other borrowers, and reverse redlining, where borrowers in minority neighborhoods are flooded with subprime loans they cannot afford despite qualifying for better terms." (link)

Los Angeles, and several other cities, previously filed similar lawsuits against other large banks:

"Los Angeles in December filed similar lawsuits against Bank of America Corp , Citigroup Inc and Wells Fargo & Co , the next three largest U.S. banks. Wells Fargo on Wednesday lost its bid to dismiss its lawsuit.

Cook County, Illinois, which encompasses Chicago, has filed similar lawsuits against Bank of America and HSBC Holdings Plc , while Providence, Rhode Island on Thursday sued a unit of Spain's Banco Santander SA .

Baltimore, Cleveland and Memphis, Tennessee are among other cities to bring similar cases against banks. Atlanta-area counties have also sued HSBC.

Los Angeles said JPMorgan loans made from 2004 to 2011 in predominantly black or Latino neighborhoods were 2.19 times more likely to go into foreclosure than loans in mainly white areas. It said loans to minority borrowers went into foreclosure faster."  (link)

Could this approach be the solution to holding banks accountable for the foreclosure crises?

Maybe . . .

Los Angeles' lawsuit against Wells Fargo recently survived a motion to dismiss:

"Law360, New York (May 29, 2014, 2:43 PM ET) -- A California district judge on Wednesday kept alive a lawsuit filed by the city of Los Angeles alleging that Wells Fargo & Co. directed predatory mortgage lending practices at minority borrowers before the financial crisis that led to a wave of foreclosures, costing the city millions of dollars in tax revenue.

U.S. District Judge Otis D. Wright II denied the bank's motion to dismiss the case, ruling that the city had provided enough detailed evidence that predatory lending practices . . . ." (link)

The most recent Los Angeles case is City of Los Angeles v. JPMorgan Chase & Co et al, U.S. District Court, Central District of California, No. 14-04168. 

The press release and complaint are available here.

Brown v. Board of Education - Why We Need to Keep Pushing Forward

The 60th anniversary of Brown v. Board of Education is an important reminder to advocates for civil rights, in all contexts, to remember why it is we do the work we do.

Taking even a quick look back at some of the clips over the weekend was, for me, nothing short of inspirational.  That racial justice advocates could believe in their mission and win during a time of deep-seated racial discrimination and violence is nothing short of a miracle.

So that hopefully you could get the same feeling, I decided I had to find and post a video that at least begins to remind us of this most basic fight for equality in America.

Here is a slightly dated but still inspirational PBS video of that victory.

This weekend I basked in the glow of this video, and a few others, secretly congratulating myself for being an, albeit tiny, modern part of this oldest of struggles for equality in America.

And then the New York Civil Liberties Union was a complete killjoy - I received the below  email from them Sunday.

Well - back to work folks...

NY Has the Most Segregated Schools in America

Sixty years ago, the Supreme Court issued its landmark ruling in Brown v. Board of Education, ending legal segregation in public schools.

But equal education for all New York children remains a dream deferred.

New York has the most segregated schools of any state in the country–with the worst segregation upstate. Some schools have been called "apartheid schools" because racial isolation is so extreme.

It's time to reaffirm our commitment to Brown. Tell New York's policy makers that you want real solutions that fix school segregation in New York.

Racial isolation is harmful to children. On top of that, children in mostly black and Latino schools have shockingly fewer resources such as certified teachers, computers, libraries, art classes and textbooks. Unsurprisingly, they receive lower scores on standardized tests from grade school to high school and are far less likely to graduate.

Honor this proud moment in our country's history by telling New York's political leaders it's time to fulfill Brown's 60-year-old promise of equal education.

Thank you for helping New York keep its promise of equal education for all children, regardless of the color of their skin. Please forward this message to your friends.

Sincerely,

Donna Lieberman
Executive Director
New York Civil Liberties Union