JP Morgan Chase Lawsuit Alleges Discriminatory Mortgage Lending
LOS ANGELES (CBSLA.com) — City prosecutors announced Friday a lawsuit against JP Morgan Chase claiming the bank engaged in discriminatory lending that allegedly fueled a wave of foreclosures in Los Angeles.
The lawsuit filed by the City Attorney's Office (PDF) seeks damages for reduced property tax revenues resulting from the decreased value of foreclosed properties, which 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.
In a statement, City Attorney Mike Feuer said the city is still reeling from years of foreclosures that continue to diminish the property tax revenues and increase the need for public services.
"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 legal action 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.
Chase spokeswoman Suzanne Ryan said the bank will "vigorously defend this lawsuit."
"We are disappointed the L.A. city attorney is pursuing an adversarial approach to address city finances impacted by the recent economic downturn," she said. "While the downturn was beyond our control, we will continue to partner with Los Angeles in the recovery."
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