City Of Cleveland Files Subprime Mortgage Suit Against Wells Fargo, 20 Others For Leaving Neighborhoods In Ruins

In Cleveland, Ohio, The Cleveland Plain Dealer reports:

• Mayor Frank Jackson took aim at Wall Street on Thursday with a lawsuit against 21 major investment banks that he said have enabled the subprime lending and foreclosure crisis here. The one-of-a-kind suit, filed in Cuyahoga County Common Pleas Court, accuses venerable institutions such as Deutsche Bank, Goldman Sachs, Merrill Lynch and Wells Fargo of creating a public nuisance. Jackson contends the companies irresponsibly bought and sold high-interest home loans. The result: widespread defaults that depleted the city's tax base and left entire neighborhoods in ruins.

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• Cleveland is the second major U.S. city this week to sue over the ills of subprime loans. On Tuesday, Baltimore sued Wells Fargo, alleging the bank intentionally sold high-interest mortgages more to blacks than to whites - a violation of federal law. The Baltimore and Cleveland efforts are believed to be the first attempts by large cities to recover losses blamed on the foreclosure epidemic, which has particularly plagued Ohio.

• But Cleveland's suit is even more unique because the city has based its complaints on a state law that relates to public nuisances. The suit also is far more wide-reaching than Baltimore's in that it targets the investment banking side of the industry, which feeds off the mortgage market.

For more, see Cleveland sues 21 investment banks over subprime mess (Big-name firms blamed in costly subprime crisis).

See also, The Cleveland Free Times: Payback Time (Cleveland Sues Banks Over The Foreclosure Crisis, But Takes A Legal Road Less Traveled).

For a copy of the lawsuit, see City of Cleveland v. Deutsche Bank Trust Company, et al. (available online courtesy of Bill Moyers Journal) (if you have a problem with this link, drop me a line at HomeEquityTheft@yahoo.com and I'll e-mail it to you - be sure and put "City of Cleveland v. Deutsche Bank" in "subject" line).

Go here for updated posts on Cleveland's lawsuit against 21 investment banks.