Citi, Wells Fargo lose bids to stop L.A. mortgage foreclosure discrimination suits

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Citi, Wells Fargo lose bids to stop L.A. mortgage foreclosure discrimination suits

Citi, Wells Fargo lose bids to stop L.A. mortgage foreclosure discrimination suits

From Reuters-

A lawsuit by the City of Los Angeles accusing Citigroup Inc of mortgage discrimination can go forward, a federal judge ruled on Monday, turning down the bank’s motion to dismiss the case stemming from last decade’s real estate boom.

The lawsuit, filed in December, accuses Citigroup of engaging in a “continuous pattern” of discrimination since at least 2004 by targeting minorities for high-cost mortgage loans, violating the U.S. Fair Housing Act. The city is seeking damages from the bank for the costs of extra services and lost tax revenue in blighted neighborhoods.

Citigroup is one of four banks that Los Angeles has sued since December for allegedly giving minorities home loans they could not afford, resulting in a wave of foreclosures and a lower tax base.

[REUTERS]

From Bloomberg-

Wells Fargo & Co. (WFC) lost a bid to throw out a lawsuit by Los Angeles in the city’s renewed effort to hold mortgage lenders liable for record foreclosures during the collapse of the U.S. housing market.

U.S. District Judge Otis Wright II in Los Angeles, without ruling on the merits of the claims, today said the city’s allegations that the bank targeted minority lenders with “predatory loans” were legally sufficient at this stage to proceed with the case.

The second-largest U.S. city separately sued Wells Fargo, Citigroup Inc. (C) and Bank of America Corp. last year, saying the three mortgage lenders engaged in discriminatory practices since at least 2004, placing minority borrowers in loans they couldn’t afford and driving up the number of foreclosures in their neighborhoods.

[BLOOMBERG]

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