Bank of America accused of mortgage discrimination
The city of Los Angeles has filed a lawsuit against Bank of America, the third banking giant accused of mortgage discrimination in minority communities that in turn led to a wave of foreclosures, reduced property tax revenue and increased costs for city services.
The city alleges that Bank of America “engaged in a continuous pattern and practice of mortgage discrimination in Los Angeles since at least 2004" by demanding different terms or conditions on loans that “vulnerable” borrowers could not afford, according to the complaint filed Friday in federal court.
Bank of America officials could not be reached for comment.
The city is seeking damages based on reduced property tax revenues on the decreased value of foreclosed properties, along with increased costs for city services resulting from foreclosures.
“In order to maximize profits at the expense of the city and minority borrowers,” Bank of America “adapted its unlawful discrimination to changing market conditions,” the lawsuit cited. “This unlawful pattern and practice conduct is continuing through the present.”
City Atty. Mike Feuer also sued Citigroup and Wells Fargo on Thursday, alleging that both banks engaged in predatory lending practices and redlining that saddled minorities with loans they couldn’t afford and resulted in a disproportionately high number of foreclosures in their neighborhoods, compared with white neighborhoods.
Banking officials released statements describing the cases as “baseless” and “without merit.”
Wells Fargo, the nation’s biggest mortgage lender, said it was proud of its record “as a fair and responsible lender.”
Citigroup said its lending standards are “fair to all” and its lending criteria are “blind to race, ethnicity, gender and any other prohibited basis.”
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