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Wells Fargo, BofA, others sued by city of Cleveland over foreclosures
Friday January 11, 6:11 pm ET

The city of Cleveland sued Wells Fargo and other mortgage lenders alleging that high-rate mortgages that have forced many into foreclosure and left entire neighborhoods in ruins.

Officials of the Ohio city hope to collect hundreds of millions in damages, including depressed tax revenues from lower property values and money spent on demolishing and boarding up abandoned houses.

"To me, this is no different than organized crime or drugs," Cleveland Mayor Frank Jackson told the Cleveland Plain Dealer.

Cleveland is the second major city this week to sue Wells Fargo. (NYSE: WFC - News) The San Francisco bank also faces litigation from the City of Baltimore.

Cleveland's suit differs from Baltimore's in that it cites an Ohio law against public nuisances and targets the investment banking side of the business which played a key role in fueling the subprime mortgage business.

Wells Fargo spokesman Kevin Waetke earlier this week defended the bank's lending practices in response to the Baltimore suit.

"We do not tolerate illegal discrimination against or unfair treatment of any consumer," Waetke told the New York Times. "Our loan pricing is based on credit risk. We are committed to serving all customers fairly -- our continued growth depends on it."

Cleveland's suit also cites Bank of America (NYSE:BAC - News), Deutsche Bank, Goldman Sachs, (NYSE: GS - News) Merrill Lynch (NYSE: MER - News), Citigroup (NYSE: C - News), Credit Suisse, J.P. Morgan Chase (NYSE: JPM - News), Bear Stearns, Ameriquest Mortgage Co, Washington Mutual (NYSE: WM - News), Countrywide Financial (NYSE: CFC - News), Morgan Stanley (NYSE: MS - News), Fremont General Corp, GMAC-RFC, Greenwich Capital Markets, HSBC Holdings, IndyMac Bancorp, Lehman Brothers, Novastar Financial and Option One Mortgage Corp.

http://biz.yahoo.com/bizj/080111/1575675.html?.v=2