JPMorgan sued by Miami over alleged mortgage discrimination

NEW YORK, June 16 Mon Jun 16, 2014 5:13pm BST

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NEW YORK, June 16 (Reuters) - JPMorgan Chase & Co has been sued by the city of Miami, accusing the bank of predatory mortgage lending in minority neighborhoods that allegedly caused a wave of foreclosures during the last decade's housing crisis.

The lawsuit, filed on Friday in federal court in Florida, said the country's largest bank engaged in a continuous practice of discriminatory mortgage lending since at least 2004, violating the U.S. Fair Housing Act.

After issuing high-cost loans to minorities in the years before the housing crisis, JPMorgan later refused to refinance the loans on the same terms as it extended to whites, leading to defaults and foreclosures, the complaint said.

The lawsuit came just weeks after the city of Los Angeles filed similar claims against JPMorgan, seeking to recoup damages for lost tax revenue and increased city services needed in blighted neighborhoods.

"The Miami City Attorney's claims are baseless and stand contrary to our long record of providing affordable housing to low- to moderate-income families across the region," JPMorgan spokesman Jason Lobo said. The bank will defend itself against the claims, he said.

Wells Fargo & Co, Citigroup Inc and Bank of America Corp also face lawsuits by Los Angeles and Miami for allegedly giving minorities home loans they could not afford, resulting in massive defaults.

The banks have contested the claims, saying they have records as responsible lenders.

Among major cities, Miami has led the country in foreclosures, and JPMorgan's practices contributed to its problems, Friday's lawsuit alleged.

Loans in predominantly minority neighborhoods in Miami were about 4.6 times more likely to result in foreclosure than loans in neighborhoods with a majority of white residents, the lawsuit said.

Miami is still being damaged because of the services needed to combat unsafe and dangerous conditions, crime and even gang activity at foreclosed properties, the lawsuit said.

Wells Fargo and Citigroup recently lost bids to have their lawsuits tossed.

A spokesman for the city of Miami did not immediately return a request for comment.

The case is City of Miami v JPMorgan Chase & Co, U.S. District Court, Southern District of Florida, No 14-cv-22205 (Editing by Will Dunham and Jeffrey Benkoe)

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Comments (2)
CharlesReed wrote:
All you need is a copy of the credit reports that were run by the banks and this game is over. The stats already show that most would have qualified for a Prime, FHA or VA loan. As a ex-Wells Fargo Mortgage loan officer I can show just how these minorities were steered into bad loans!

Jun 16, 2014 9:50pm BST  --  Report as abuse
bobinmo wrote:
ANY borrow should have the right to choose who they feel entitled to a home loan. This sounds more like Miami seeking a way to get money out of a bank for “their” problem. NO bank should be forced into loaning money to anyone. If the borrower has earned the proper credit rating, then this whole story is a mute point.

Jun 17, 2014 5:21pm BST  --  Report as abuse
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