Cleveland Real Estate News

Was the Cleveland lawsuit against 21 mortgage lenders too broad scoped or vague? Did they try to go after too many lenders at once? I don’t know the answers, but apparently the city of Baltimore is trying to learn from our loss. This Baltimore Sun article by Julie Bykowicz outlines their cities efforts as well as opinions on why ours did not work.

It’s fascinating (and I have to say the article is a lot more in depth about strategies, procedure and why suit is filed than we got in our newspaper reporting.  Because of the reporting or because attorneys for Baltimore City and City officials were more forthcoming? Or should I say transparent? But I digress…

They are participating in a trial in front of a US District Judge.  Lawyers for both Wells Fargo and Baltimore will be involved.

What do they say is different from our case?

They are charging racially biased predatory lending:

Representatives for Wells Fargo have said the lawsuit, filed in January 2008, “absolutely lacks merit” and is a wrongheaded reaction by a city that is “thirsty for revenue.”

City officials are making a two-part argument in their assertion that Wells Fargo violated the federal Fair Housing Act. They allege in court documents that Wells Fargo disproportionately gave its black customers “abusive subprime loans that are, in effect, designed to fail.” And those bad mortgages, the lawyers say, left the city with a glut of foreclosed homes that have cost tens of millions in lost property taxes and in city services such as public safety and sanitation.

How Baltimore says they differ from us:

The city expects Wells Fargo to raise a recently dismissed lawsuit in Cleveland. The Ohio city had sought damages against Ameriquest Mortgage Securities on the theory that it had violated state public nuisance laws by providing secondary market funding for subprime loans. The judge who granted Ameriquest’s motion to dismiss in May said Cleveland would not be able to prove direct harm.

We (Cleveland) were interested in making sure that the 21 lenders/vacant and foreclosed property owners were not just dumping low cost housing on the market but were going to be required to demolish or fix up the homes and not  further devalue neighborhood properties. See my last post on the topic.

Kudos to reporter Bykowicz. It will be interesting to see how much further along in the process Baltimore gets in their approach against lenders.

Peace Out – 3C