Federal Judge Dismisses City Of Baltimore's "Ghetto Loans" Suit; Leaves Door Open For Amended Complaint

In Baltimore, Maryland, The Daily Record reports:

• A federal judge has dismissed the city of Baltimore’s reverse-redlining lawsuit against Wells Fargo Bank and one of its units, giving it the option to narrow its complaint or appeal. Judge J. Frederick Motz said the city can tailor its claims to specific housing vacancies or their effect on a given neighborhood, if it can show a “plausible causal relationship” between the allegedly improper loans and the damages asserted.

• “It may be entirely reasonable to posit — as the city’s allegations amply support — that unscrupulous lenders took advantage of inner city residents living in a dysfunctional environment to induce them to make loans they could not afford,” Motz wrote in the opinion published Wednesday by the U.S. District Court. “It does not follow, however, that it is reasonable to infer — as the City argues — that the unscrupulous lenders themselves created the dysfunctional environment they exploited.”

• Motz’s ruling is a mandate to “sharpen our pencils,” City Solicitor George A. Nilson said. He could not say immediately which course of action the city would pursue.

For more, see Judge dismisses Baltimore’s reverse redlining suit.

See also, The Baltimore Sun: City's Wells Fargo lawsuit dismissed (U.S. judge calls claims of millions in predatory lending damages 'not plausible').

For the court ruling, see Mayor And City Council Of Baltimore v. Wells Fargo Bank, N.A. and Wells Fargo Financial Leasing, Inc.