JP Morgan’s mortgage discriminatory lawsuit by the City of Los Angeles may face the same demise in California federal court as Wells Fargo

Wells Fargo was denied motion to dismiss by the California Federal Court:

According to the City, Defendants have engaged in discriminatory lending practices that have resulted in a disparate number of foreclosures in minority areas of Los Angeles. (See Compl. ¶ 2.) Specifically, the City alleges that Defendants have engaged in “redlining” and “reverse redlining.” (Id. ¶ 4.) Redlining is the practice of denying credit to particular neighborhoods based on race. (Id. ¶ 4 n.2.) Reverse redlining is the practice of flooding a minority neighborhood with exploitative loan products. (Id. ¶ 4 n.3.)

See the full order here.

Copy of LA city attorney’s lawsuit against JP Morgan Chase

**PRESS RELEASE**
May 30, 2014

FEUER SUES JP MORGAN CHASE, ALLEGING
DISCRIMINATORY MORTGAGE LENDING
Suit Contends Bank’s Practices Deepened Foreclosure Crisis and Damaged City

Los Angeles–Continuing to tackle the impact of the foreclosure crisis on Los
Angeles, City Attorney Mike Feuer today sued another of the nation’s largest
banks, JP Morgan Chase. The suit alleges the bank engaged in discriminatory
lending, which the City contends led to a wave of foreclosures that continues to
diminish the City’s property tax revenues and increase the need for costly City
services.

The new litigation against JP Morgan Chase comes on the heels of a federal
court ruling on Wednesday that denied a motion by Wells Fargo to dismiss a
similar complaint by the City. Feuer sued Wells Fargo, Bank of America and
Citigroup in December.

“L.A. continues to suffer from the foreclosure crisis–from blight in our
neighborhoods to diminished revenue for basic City services,” said
Feuer. “We’re fighting to hold those we allege are responsible to account and to
help bring back every community in our City.”

The City seeks damages for reduced property tax revenues resulting from the
decreased value of foreclosed properties–foreclosures the City claims were
caused by allegedly discriminatory mortgage lending. The suit also seeks
damages for the increased cost of City services resulting from the foreclosures.

As a member of the California State Assembly Feuer was an author of the
Homeowners’ Bill of Rights, along with other legislation to protect homeowners
grappling with foreclosure.

A copy of the complaint is attached.

Click to access lacityp_028287.pdf

 

Santander Bank faces pending lawsuit over lending discrimination

Some banks are still doing redlining..

 According to an articlein The New York Times, the city of Providence plans to files a suit against Santander Bank for just this.

“The attitude is, if we can’t do subprime loans, predatory loans in the black community, we won’t do any loans at all,” said John P. Relman, the lead lawyer on the case. “For us it is a civil rights issue.”

The lawsuit claims that between 2009 and 2012, the number of new mortgages made by Santander in white neighborhoods in Providence was 25 percent higher per year than it was in 2006 and 2007, while the number of new mortgages in minority neighborhoods declined by 63 percent. 

Source: NYT