The City of Miami has suffered in large ways since the advent of the Great Recession of recent years, and city officials think they can readily point a finger at one bad actor that has contributed materially to the city’s woes.
In fact, Miami officials are doing more than pointing. On behalf of the city, they recently filed a federal lawsuit against JPMorgan Chase & Co., alleging that the massive entity — the country’s largest bank — purposefully and systematically engaged in bad-faith wrongdoing that harmed Miami financially.
And, they contend, that conduct, marked centrally by mortgage lending that discriminated against certain homeowners, continued for many years.
What the city specifically alleges is that JPMorgan pursued predatory lending practices that targeted non-white borrowers. The legal complaint filed last month states that housing loans with comparatively high costs were made to minorities, with the bank thereafter refusing to refinance those loans on similar terms that were offered to white borrowers.
The inevitable result, notes the complaint, was and continues to be a high level of foreclosure activity. In fact, Miami has consistently ranked at or near the top of all large American cities for its foreclosure rate, both as a percentage of total homes and in absolute terms.
The complaint contends that a direct result of the bank’s conduct has been the city’s need to spend large amounts of money on crime control and to curb unsafe conditions in high foreclosure areas.
Unsurprisingly, JPMorgan refutes the allegations, with a spokesperson calling the complaint “baseless.”
The bank is not the first lender to be sued by the City of Miami. Wells Fargo & Co., Bank of America Corp. and Citigroup Inc. are also named defendants in similar litigation filed by the city.
Source: Reuters, “City of Miami sues JP Morgan, claims mortgage discrimination,” Dena Aubin, June 16, 2014