To recoup losses from the housing collapse, Miami pursues a novel suit

[inanna]

November 6 at 6:34 PM

MIAMI — The housing collapse of 2008 nearly broke the city of Miami. Now, its leaders have embarked on a novel and aggressive legal strategy to recoup losses from the big banks they say created the crisis with discriminatory and predatory lending practices.

It is a high-stakes effort that is being encouraged by many cities, and the banks Tuesday will ask the Supreme Court to stop it before it takes root.

Miami sued Bank of America, Wells Fargo and Citigroup under the 1968 Fair Housing Act, which bars discrimination in the sale, rental and financing of housing. The law states its purpose as providing for fair housing “throughout the United States.”

The city says that it can prove the lending institutions discriminated against Hispanic and African American residents by directing them into high-interest, risky loans. The resulting defaults destabilized Miami’s poorest neighborhoods, and the resulting loss of tax revenue sent the city to the brink of bankruptcy, they say.

cont'd...

Link: https://www.washingtonpost.com/politics/courts_law/to-recoup-losses-from-the-housing-collapse-miami-pursues-a-novel-suit/2016/11/06/66aa5744-a2a5-11e6-8d63-3e0a660f1f04_story.html

[procon]

1. If Miami is successful, other cities will join in. Maybe the banksters days are numbered. nt

[Travis_0004]

2. I doubt it

And if the banks did collapse, the whole economy crashes with it.

[procon]

3. There's a lot of possibilities between a lawsuit and "collapse", yeah? nt