Los Angeles sues JPMorgan over loans

31 May 2014 14:14

Los Angeles officials have lodged a lawsuit against the largest American bank for pushing poor minorities into high-risk loans they could not afford.

The officials accused JPMorgan Chase & Co. of steering the cash-strapped borrowers into risky home loans, which in turn triggered foreclosures.

In a lawsuit filed Friday in US District Court, the Los Angeles city attorney said foreclosures added to city services expenses and caused a depreciation of property values.

The nation's largest bank “has engaged in a continuous pattern and practice of mortgage discrimination in Los Angeles since at least ۲۰۰۴ by imposing different terms or conditions on a discriminatory and legally prohibited basis," the city attorney noted.

“L.A. continues to suffer from the foreclosure crisis -- from blight in our neighborhoods to diminished revenue for basic City services," L.A. City Atty. Mike Feuer said in a statement.

"We're fighting to hold those we allege are responsible to account and to help bring back every community in our City."

According to the city officials, the so-called mortgage discrimination, which has existed since ۲۰۰۴, has imposed different terms or conditions on a discriminatory and legally prohibited basis.

The lawsuit aims to collect unspecified damages based on hits to city revenue from discriminatory lending.

Low-income advocacy groups have previously said the mortgage crisis led to ۲۰۰,۰۰۰ foreclosures in Los Angeles from ۲۰۰۸ to ۲۰۱۲, a wave that depressed city property tax revenue by $۴۸۱ million, according to JPMorgan suit.

However, JP Morgan denies the charges. In the past, similar complaints have been filed against other major US banks, such as Wells Fargo, Bank of America, and Citigroup.

Story Code: 87479

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