Consulting with Legal Services Program, Two Tennessee Counties Consider Lawsuit Against National Lenders for “Deceptive” and “Discriminatory” Lending Practices That Forced Foreclosures in Black Community
Legal Services E-lert
Bibliographic Info:
Author: Alex Doniach
Source: CommercialAppeal.com (TN)
Date: December 14, 2008
CommercialAppeal.com reports: "Memphis and Shelby County leaders are proposing to sue major national lenders who they say helped create a local foreclosure crisis by engaging in ‘deceptive' and ‘discriminatory' lending practices targeted at the black community . . . . The local governments are counting on a suit to recoup some of those losses and temporarily put a halt to foreclosures going forward . . . . [Shelby County Mayor A C] Wharton and Memphis Mayor Willie Herenton's administrations have discussed the possibility of legal action for months with the help of [LSC-funded] Memphis Area Legal Services, but city and county legislators -- who have been left largely out of the loop -- will get a first look at the possible suit this week . . . . Broad support for the suit is anticipated . . . . Much like [litigation in Baltimore], which was filed against Wells Fargo Bank in January and remains pending, local leaders are alleging that various still-unnamed national lenders have violated fair-housing laws by targeting minority neighborhoods with sub-prime and sometimes fraudulent or predatory loans employing such means as falsifying incomes on loan applications. In a practice called ‘reverse redlining,' the lenders placed borrowers in targeted minority communities into loans they could not afford, later forcing them to go into foreclosure."