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Saturday, January 12, 2008

Cleveland sues lenders over subprime mortgage loans

January 12 2008
City says 21 banks and mortgage companies signed off on deals they knew they shouldn't have made. Likening their actions to those of organized crime syndicates, Cleveland's Mayor is suing 21 major banks and mortgage companies for the roles they played in the subprime mortgage crisis that devastated many neighborhoods in the city. The suit, filed in Cuyahoga County Common Pleas Court, alleges that in pushing subprime mortgagesin Cleveland, the companies created a public nuisance in violation of state law. City officials hope to recover hundreds of millions of dollars in damages for lost property tax revenue, the cost of demolishing homes left abandoned and the cost of policing neighborhoods devastated by thousands of foreclosures.

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