During the housing crisis of the mid-2000’s, cities across the country filled with foreclosed homes. These abandoned homes became symbols of dreams lost and easy targets for criminals. The housing crisis had a profound impact on our overall economy and in the financial lives of the individuals swept up in its wake. However, there was an unexpected victim in the housing crisis, that’s looking to hold banks accountable and recover losses of its own.
Cities throughout the United States, including Miami, Oakland, Providence and Los Angeles are filing lawsuits against banks claiming that they suffered as well during the housing crisis. These cities contend that lending practices that either denied credit to individuals in certain neighborhoods because of race, or targeted home buyers in minority neighborhoods with high interest loans, led to increased foreclosures. These foreclosures are said to represent loss tax revenues and property values for these cities while increasing the costs of keeping surrounding neighbors safe. The cities are also contending that these practices are in violation of the Fair Housing Act, which “prohibits housing discrimination on the basis of race, color, religion, sex, or national origin.” The act allows individuals to sue lenders if they feel they have been discriminated against or if they feel they have been negatively affected by unintentional discrimination.
Currently, the city of Miami has recently filed lawsuits against a number of banks including Bank of America, Citibank and Wells Fargo. However, the Eleventh Circuit Court has sent the cases back to the lower court, which dismissed the cases. Now, Miami and other cities have filed an amended complaint. The city of Oakland filed a similar suit to which a judge declined to dismiss the suit.
While the argument for the cities being compensated for damages related to the housing crisis lie in the notion that lenders engaged in practices that would ultimately lead to foreclosures, the banks have a different point of view. Banks, like Wells Fargo, feel not only that the Fair Housing Act was not meant to come to the aid of cities, but that high interest loans were meant to provide opportunities for home ownership that would not be present otherwise.
The lawsuits by the cities represent a bold attempt to hold lending institutions accountable for the housing crisis, a feat that’s been difficult to attain to this point. Individuals, especially those who have been adversely affected by the housing crisis, typically do not have the resources to compete with the nation’s largest banks. If it is determined that they are unable to file lawsuits, the job of holding banks accountable falls on the justice department, or individual consumers through the defense of individual foreclosures on their homes.
If you are facing foreclosure, it’s important to know that you have options and that help is available. The Tampa foreclosure attorneys at McIntyre Thanasides Bringgold Elliott Grimaldi & Guito, P.A. can establish a strategy for overcoming this difficult time. Contact them today at 844-511-4800.