JPMorgan Chase & Co has been sued by the city of Miami, which has accused the bank of predatory mortgage lending in minority neighborhoods that allegedly caused a host of foreclosures during the last decade's housing crisis.
The lawsuit, filed in a Florida federal court, said the country's largest bank engaged in a continuous practice of discriminatory mortgage lending since at least 2004, violating the U.S. Fair Housing Act.
The complaint says that after issuing high-cost loans to minorities in the years before the housing crisis, JPMorgan later refused to refinance the loans on the same terms as it extended to whites, leading to defaults and foreclosures.
A few weeks ago, Los Angeles filed similar claims against JPMorgan, seeking to recoup damages for lost tax revenue and increased city services needed in afflicted neighborhoods.
JPMorgan, however, is denying the allegations made against them.
"The Miami City Attorney's claims are baseless and stand contrary to our long record of providing affordable housing to low- to moderate-income families across the region," JPMorgan spokesman Jason Lobo said.
But the global financial services firm isn’t the only bank in hot water. Wells Fargo & Co, Citigroup Inc and Bank of America Corp also face lawsuits by Los Angeles and Miami for allegedly giving minorities home loans they could not afford, resulting in massive defaults. The banks, however, contested the allegations and contended that they have records as responsible lenders.
According to the the city of Miami’s lawsuit, among major cities, it has led the country in foreclosures, and JPMorgan's practices contributed to its problems. Loans in predominantly minority neighborhoods in Miami were about 4.6 times more likely to result in foreclosure than loans in neighborhoods with a majority of white residents.
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