The city of Los Angeles has reportedly filed separate lawsuits against Citigroup, Bank of America and Wells Fargo, accusing the banks of engaging in discriminatory mortgage lending practices.
In the complaints filed last week in federal court, the city seeks damages for reduced property tax revenue and the costs of maintaining foreclosed properties, according to a Bloomberg News report.
The suits accuse the banks of engaging in discriminatory lending to minority borrowers since at least 2004, according to the report. Each alleges that the bank intentionally matched mortgages to minority borrowers that they couldn't afford. This, in turn, resulted in a high number of foreclosures in minority neighborhoods, which in turn, resulted in a wave of foreclosures and a subsequent decline in property values and tax revenues.
The city's complaint alleges that the banks had made it a ‘practice’ to target minority borrowers with ‘predatory pricing and products.’ It contends that the foreclosures were so ‘disproportionately concentrated in minority neighborhoods’ that it could not possibly be the ‘product of random events,’ according to the report.
Homeowners in Los Angeles lost about $78.8 billion in equity as the result of the approximately 200,000 foreclosures that were processed from 2008 through 2012, the city says in its complaint.
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