Daily News and Information for the Mortgage Loan Originator
21 Lenders Sued for Causing Foreclosure Mess
Monday, January 14, 2008
- By Staff Writer, Originator Times
CLEVELAND, OH - The city of Cleveland is suing 21 of the nation's top lenders saying they violated Ohio's public nuisance law. Mayor Frank Jackson along with his Law Director Robert Triozzi announced that the city is seeking damages from the wall street companies for their part in propagating the foreclosure crisis.
Jackson and Triozzi allege that unscrupulous lending practices have wreaked havoc on Cleveland's neighborhoods, thereby creating a public nuisance.
"Cities can rebound, however it is extremely costly to do so given that declining tax revenues are part of the fallout of foreclosures,” said Mayor Jackson in a released statement.
"There has been a national conversation about how the banks recover from the foreclosure crisis but no one is talking about what should be done to support Cities who have the challenge of managing this situation,” said Triozzi in a released statement.
The 21 defendants are as follows:
Ameriquest Mortgage Company
Bank of America Corporation
The Bear Stearns Companies
Citigroup, Inc.
Countrywide Financial Corp.
Credit Suisse (USA)
Deutsche Bank Trust Company
Fremont General Corporation
GMAC-RFC
Goldman Sachs Group
Greenwich Capital Markets, Inc.
HSBC Holdings, PLC
Indymac Bancorp, Inc.
J.P. Morgan Chase Co.
Lehman Brothers Holdings, Inc.
Merrill Lynch & Co., Inc.
Morgan Stanley
Novastar Financial, Inc.
Option One Mortgage Corporation
Washington Mutual, Inc.
Wells Fargo & Company
This lawsuit is the second of its kind in less than a week. Earlier, the City of Baltimore announced they are suing Wells Fargo Bank, alleging that the lender engaged in "irresponsible subprime lending practices" that specifically targeted and harmed Baltimore's African American and minority communities and created the high rates of foreclosure in that city.
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Foreclosures Up 75 Percent in 2007 Year-end data from the 2007 U.S. Foreclosure Market Report shows a total of 2,203,295 foreclosure filings - default notices, auction sale notices and bank repossessions - were reported on 1,285,873 properties nationwide during the year, up 75 percent from 2006. The report also shows that more than 1 percent of all U.S. households were in some stage of foreclosure during the year, up from 0.58 percent in 2006.
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The investigation centers around Countrywide's underwriting and origination practices. The FBI also wants to know if Countrywide lied about...
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