Some Predict Other Cities To Follow Cleveland's Lead In Suit Against Major Lending Institutions; Wall Street Buzzing

In Cleveland, Ohio, The Cleveland Plain Dealer reports:

• Cleveland's lawsuit against 21 investment banks is likely to inspire similar efforts from cities and even homeowners who feel they have been hurt by foreclosures. That's the prediction from attorneys and others who follow real estate and finance, given the national attention the city has received with its novel argument that the banks created a public nuisance. Two lawyers -- one who believes in the city's position, and one who does not -- each described the case Friday as "just the tip of the iceberg." The suit, filed late Thursday in Cuyahoga County Common Pleas Court, accuses the banks of encouraging irresponsible home loans that ruined entire neighborhoods. Among the banks targeted were Deutsche Bank, Goldman Sachs and Merrill Lynch. Wall Street has been buzzing since. Lawyers, lenders and civic leaders have been, too. The case even caught the attention of CNN commentator Lou Dobbs.

For more, see Cleveland's lawsuit against investment banks may prompt other cities to pursue action (Cleveland seeks retribution in foreclosure epidemic).

For a Cleveland Plain Dealer editorial on this story, see Cleveland's lawsuit against Wall Street is bold, and a little shaky (Cleveland is going after the big investment houses with a gutsy, risky suit over destructive subprime lending).

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

For the original Cleveland Plain Dealer story, see Cleveland sues 21 investment banks over subprime mess (Big-name firms blamed in costly subprime crisis).