Miami's mortgage discrimination suits against Citi, Wells dismissed

Thu Jul 10, 2014 4:26pm EDT
 
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By Dena Aubin

(Reuters) - A federal judge has dismissed mortgage discrimination lawsuits filed by the City of Miami against Citigroup Inc and Wells Fargo & Co, following the dismissal of a similar lawsuit against Bank of America Corp earlier this week.

On Wednesday U.S. District Judge William Dimitrouleas dismissed the city's claims against Citi and Wells under the U.S. Fair Housing Act. He referred to his reasoning in the Bank of America case, where he said Miami lacked standing to sue.

Miami had sued the three banks in December, accusing them of causing a flood of foreclosures in minority neighborhoods during the last decade's housing crisis by giving borrowers high-cost mortgage loans they could not afford.

The city sought damages under the 1968 Fair Housing Act for lost property tax revenue because of a decline in home values and for extra city expenses in blighted neighborhoods.

In his dismissal of the Bank of America case, Dimitrouleas had said that the city's claims were not covered by the Fair Housing Act, which was passed to prevent discrimination and assure fair housing across the country.

The judge said Miami's claims were only "marginally related" to the purpose of the act.

The city's alleged harm was also too remote from the bank's conduct to bring a suit, Dimitrouleas said.

Spokesmen for Wells Fargo, Citigroup and Miami could not immediately be reached for comment.   Continued...

 
The logo on a Wells Fargo bank building is seen in downtown San Diego, California March 18, 2014. REUTERS/Mike Blake