Editors Note: When Banks defraud American cities out of county recording fees and saddle them with the maintenance of foreclosed real estate that the banks have abandoned or neglected- cities lose revenue. The cities are then unable to care for the homeless families that were displaced by the banks and may neglect to provide basic municipal services like public water, sanitation or maintain the infrastructure.
The city of Detroit is a perfect example of how a bankrupt city was unable to properly carry out its assigned responsibilities to its citizens due to financial deficiencies caused in part by the Too Big Too Fail banks. In turn, thousands of families were poisoned by their drinking water that was contaminated with lead. The city, who didn’t have the funding to address the issue, simply swept the issue under the rug……until people began getting sick and dying. Now, many Detroit residents will suffer life long illnesses and never be made whole. Don’t think it can’t happen in your own home town. #BreaktheBanks
May 3, 2016
But the families who lost their homes weren’t the only ones hurt by the foreclosure crisis. So there’s an argument to be made that they shouldn’t be the only ones who can go after the lenders. Cities, for example, lost tax revenue when homes sat vacant, and saw property values within their boundaries decrease when vacant and boarded-up homes sat empty. Cities had to pay for police and fire protection to keep those homes from being vandalized and to respond to reported break-ins and criminal activity at the houses.
So should cities be able to sue the banks, too?
That’s the question making its way through courts across the country after municipalities including Los Angeles, Miami, Oakland, and Providence all filed lawsuits against lenders under the Fair Housing Act. The lawsuits, which the banks are fighting to have dismissed, argue that the lending practices of these banks harmed the cities too.
When lenders targeted minorities for risky loans, knowing that the borrowers would likely lose their homes, they knowingly deprived cities of tax revenue while making them shoulder the expenses of blocks of foreclosures, the lawsuits allege. Oakland, for instance, argues in its complaint against Wells Fargo that the city “has suffered economic injury based upon reduced property tax revenues resulting from (a) the decreased value of the vacant properties themselves, and (b) the decreased value of properties surrounding the vacant properties.” Last month a judge declined to dismiss the suit.
…..Continued at The Atlantic.
Filed under: foreclosure