Los Angeles drops mortgage discrimination case against JPMorgan

Thu Sep 3, 2015 1:39pm EDT
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By Dena Aubin

NEW YORK (Reuters) - Los Angeles has dropped a lawsuit accusing JPMorgan Chase (JPM.N: Quote), the largest U.S. bank, of discriminatory mortgage lending, ending the first of the city's four lawsuits accusing major banks of driving up foreclosures among minority borrowers.

Disclosed in a filing on Tuesday in a California federal court, the agreement ends a lawsuit attempting to hold the bank liable for lost property tax revenues caused by falling home values and the cost of repairing blight in minority neighborhoods hit by foreclosures.

A hangover from the 2007-2008 financial crisis, the lawsuit and others like it were brought by a handful of local governments claiming damages for economic destruction wrought nationwide by foreclosures, lost taxes and neighborhood blight. The legal actions have brought only mixed results as banks strongly contested claims that they discriminated.

Los Angeles is still pursuing similar complaints against Bank of America <BAC.N >, Wells Fargo & Co (WFC.N: Quote) and Citigroup Inc (C.N: Quote).

JPMorgan spokesman Jason Lobo said the bank was pleased with the city's decision.

"We have consistently supported the Los Angeles community" and helped thousands of families get into homes they can afford, he said.

A spokesman for the city was not immediately available.

Filed last year in U.S. District Court in Central California, the lawsuit accused JPMorgan of engaging in mortgage discrimination since 2004.   Continued...

A view of the exterior of the JP Morgan Chase & Co. Corporate headquarters in the Manhattan borough of New York City, May 20, 2015.  REUTERS/Mike Segar