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Tuesday, March 11, 2008

21 Lenders Sued for Causing Foreclosure Mess

CLEVELAND, OH - The city of Cleveland is suing 21 of the nation's top lenders saying they violated Ohio's public nuisance law. Mayor Frank Jackson along with his Law Director Robert Triozzi announced that the city is seeking damages from the wall street companies for their part in propagating the foreclosure crisis.

Jackson and Triozzi allege that unscrupulous lending practices have wreaked havoc on Cleveland's neighborhoods, thereby creating a public nuisance.

"Cities can rebound, however it is extremely costly to do so given that declining tax revenues are part of the fallout of foreclosures,” said Mayor Jackson in a released statement.

"There has been a national conversation about how the banks recover from the foreclosure crisis but no one is talking about what should be done to support Cities who have the challenge of managing this situation,” said Triozzi in a released statement.

The 21 defendants are as follows:
Ameriquest Mortgage Company
Bank of America Corporation
The Bear Stearns Companies
Citigroup, Inc.
Countrywide Financial Corp.
Credit Suisse (USA)
Deutsche Bank Trust Company
Fremont General Corporation
Goldman Sachs Group
Greenwich Capital Markets, Inc.
HSBC Holdings, PLC
Indymac Bancorp, Inc.
J.P. Morgan Chase Co.
Lehman Brothers Holdings, Inc.
Merrill Lynch & Co., Inc.
Morgan Stanley
Novastar Financial, Inc.
Option One Mortgage Corporation
Washington Mutual, Inc.
Wells Fargo & Company

This lawsuit is the second of its kind in less than a week. Earlier, the City of Baltimore announced they are suing Wells Fargo Bank, alleging that the lender engaged in "irresponsible subprime lending practices" that specifically targeted and harmed Baltimore's African American and minority communities and created the high rates of foreclosure in that city.


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