Every week, Praxia Partners shares important community-building news. This week, we have a special edition of the weekly news round-up that focuses on the mortgage crisis and strategies communities are taking to recover in the wake of the mortgage and foreclosure crisis.
- Earlier this month, we shared how communities are working to help families hurt by the foreclosure and underwater mortgage crises. Richmond, California is trying to use eminent domain to protect homeowners in a plan backed by UC Berkeley’s high-profile Haas Institute for a Fair and Inclusive Society.
- This week, Los Angeles announced that it is suing JPMorgan Chase & Co. over discriminatory lending that preyed on “minority” homeowners. From the Reuters’ article: “[The city] said the New York-based bank’s practices included redlining, where minority borrowers are denied credit on the same terms as other borrowers, and reverse redlining, where borrowers in minority neighborhoods are flooded with subprime loans they cannot afford despite qualifying for better terms.”
- The city previously filed suit against three other major banks (Bank of America Corp, Citigroup, Inc, and Wells Fargo & Co.) Wells Fargo attempted– and, this week, failed– to have the lawsuit dismissed. From the Bloomberg Businessweek article: “Homeowners in Los Angeles lost about $78.8 billion in home value as the result of 200,000 foreclosures from 2008 through 2012, the city said last year, citing a report by Alliance of Californians for Community Empowerment and the California Reinvestment Coalition. The lost property tax revenue to the city has been $481 million, according to the complaints.”
- Providence, Rhode Island has also filed suit against a bank this week. Their federal suit alleges that a Spanish bank, Banco Santander, “has reduced its lending in Providence’s minority neighborhoods and increased it in mostly white neighborhoods. The city says the bank’s allegedly discriminatory policies have violated the Fair Housing Act and the Equal Credit Opportunity Act” according to a Wall Street Journal article.
- In April, Cook County (home to Chicago) filed suit against Bank of America. From Crain’s Chicago Business’ article: “‘This predatory lending crisis caused tremendous tangible and intangible damage, particularly to African American and Latino communities in Cook County,’ Cook County President Preckwinkle said in a statement. ‘These practices led to the erosion of the tax base, the loss of property tax revenue, out-of-pocket costs relating to abandoned or vacant properties, and other damages to the fabric of the communities and residents arising from the resulting urban blight.'”
For more from Praxia Partners on this topic: