Miami has sued Bank of America , Wells Fargo and Citibank in U.S. federal court in Florida, for discriminatory mortgage lending practices against minority residents that resulted in a rash of foreclosures, the city said on Thursday.
The lawsuits, filed on Dec. 13, accuse the banks of engaging in a “continuous pattern and practice of mortgage discrimination in Miami” since at least 2004 in violation of the U.S. Fair Housing Act of 1968, according to a court filing.
A spokesman for Wells Fargo said the bank was “disappointed” in the city’s decision to move ahead with what it called “baseless allegations”.
“Our team members live and work here, and we are deeply invested in the success of all of our neighborhoods. We believed that the City of Miami shared our objective of helping borrowers get much needed access to credit and relief,” the spokesman added.
A spokesman for Citigroup said the lawsuit was “without merit,” adding that it was “disappointed that the City of Miami does not recognize our deep commitment to fair lending.”
“Citi considers each applicant by the same objective criteria, which are blind to race, ethnicity, gender and any other prohibited basis,” he said.
Bank of America said it had “a strong track record for fair lending,” in a statement. “When the country’s severe economic downturn peaked, and our customers were affected with personal financial hardships…we responded urgently with the solutions to assist them.”
The lawsuits accuse the banks of refusing to extend mortgage credit to minority borrowers on equal terms as offered to other borrowers – a practice known as “redlining” – as well extending credit on predatory terms. It said the practices placed vulnerable borrowers in loans they could not afford, including subprime loans.
“This unlawful pattern and practice is continuing through the present and has not terminated,” the lawsuits said.
The banks’ practices led to a wave of foreclosures in minority neighborhoods, undermining the city’s property tax revenues, according to the lawsuits.
“The State of Florida in general, and the City of Miami in particular, have been devastated by the foreclosure crisis. As of October 2013, Florida has the country’s highest foreclosure rate, and Miami has the highest foreclosure rate among the 20 largest metropolitan statistical areas in the country,” the lawsuits said.
The lawsuits seek damages including lost tax revenue and the costs of repairing and maintaining properties that went into foreclosure.
“While these banks were generating substantial revenue from the issuance of predatory mortgages, the City of Miami was losing significant revenue and incurring costs that have not been reimbursed,” the city said in a statement.
Major banks are fighting multiple legal battles related to their mortgage lending practices. The city of Los Angeles filed similar complaints against the banks earlier this month.
Also in December, Bank of America said it would pay 04 million to Freddie Mac to resolve liabilities on home loans sold to the government-controlled mortgage company.
The cases in the U.S. Southern District of Florida are City of Miami vs. Bank of America Corp, Bank of America N.A., Countrywide Financial Corp., Countrywide Home Loans, Countrywide Bank, FSB, et al; City of Miami vs. Wells Fargo & Co., and Wells Fargo Bank, N.A et al; City of Miami vs. Citigroup Inc, Citibank N.A., Citimortgage Inc., Citi Holdings Inc., and Citicorp Trust Bank, FSB.
Learn more here http://www.ibtimes.co.uk/miami-sues-major-us-banks-predatory-mortgage-lending-city-1429846