More banking woes: the lawsuits begin


by Henry J. Gomez and Thomas Ott, January 11, 2008

Mayor Frank Jackson took aim at Wall Street on Thursday with a lawsuit against 21 major investment banks that he said have enabled the subprime lending and foreclosure crisis here.

The one-of-a-kind suit, filed in Cuyahoga County Common Pleas Court, accuses venerable institutions such as Deutsche Bank, Goldman Sachs, Merrill Lynch and Wells Fargo of creating a public nuisance.

Jackson contends the companies irresponsibly bought and sold high-interest home loans. The result: widespread defaults that depleted the city’s tax base and left entire neighborhoods in ruins.

. . . “To me, this is no different than organized crime or drugs,” Jackson said in an interview with Plain Dealer reporters and editors.

“It has the same effect as drug activity in neighborhoods. It’s a form of organized crime that happens to be legal in many respects.”

. . . Cleveland is the second major U.S. city this week to sue over the ills of subprime loans.

On Tuesday, Baltimore sued Wells Fargo, alleging the bank intentionally sold high-interest mortgages more to blacks than to whites – a violation of federal law.

The Baltimore and Cleveland efforts are believed to be the first attempts by large cities to recover losses blamed on the foreclosure epidemic, which has particularly plagued Ohio. . . .

4 Responses

  1. It’s very nice , Thank you 🙂

  2. Excellent–instead of sitting around and being victims, people are beginning to stand up and say ‘enough’. If Cleveland is truly visionary, they’ll take the 10,000 vacant houses abandoned by owners and now health hazards to the communities–sue the banks and take the properties, turn around, clear the title, and then sell them as low income housing to the people who are now homeless due to the subprime housing mess.
    Talk about closing a loophole in this problem.

  3. By cracky, I believe Ann has a GOOD working theory. I think that should be done with every bank that is in this ‘mess-of-a-hole’. Since they thought they were going to get rich, let’s let the poor and homeless benefit from their greed.

  4. Let’s eliminate this corporate hold on all our lives once and forever……
    of the people, by the people and for the people…………

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