US Supreme Court rules on lawsuit from minority homeowners in Miami
Key Points(5)
- The lawsuit was filed under the Fair Housing Act and claim the banks exercised unfair lending practices in making mortgage loans to black and Hispanic home buyers resulting in loan defaults.
- These defaults resulted in foreclosures on homers which decreased Miami’s tax revenues and property values, plus resulting in the city spending more to maintain property that were abandoned as a result of foreclosure.
- Although the lawsuit was filed in 2014, it was dismissed by a local court.
- Then in September 2015, based on an appeal by the group of homeowners the 11th U.S.
- Circuit Court of Appeals overturned the lower court's decision to dismiss the law suit.
US Supreme Court to rule on lawsuit filed by Miami minority homeowners
Following an initial lawsuit filed by a group of Miami minority homeowners the US Supreme Court earlier this week heard arguments that could result in large compensations paid from commercial banks, Well Fargo, Bank of America.The lawsuit was filed under the Fair Housing Act and claim the banks exercised unfair lending practices in making mortgage loans to black and Hispanic home buyers resulting in loan defaults. These defaults resulted in foreclosures on homers which decreased Miami’s tax revenues and property values, plus resulting in the city spending more to maintain property that were abandoned as a result of foreclosure.
Specifically, the lawsuit claims the banks persuaded black and Hispanic applicants for mortgages to borrow higher-cost loans that they eventually had problems in repaying, although most of these borrowers had good credit that would have qualified them for loans with lower interest and more advantageous terms.
Although the lawsuit was filed in 2014, it was dismissed by a local court. Then in September 2015, based on an appeal by the group of homeowners the 11th U.S. Circuit Court of Appeals overturned the lower court's decision to dismiss the law suit. Following this ruling Bank of America and Wells Fargo appealed to the US Supreme Court.
Earlier this week the eight justices heard arguments from attorneys representing Bank of America and Wells Fargo. According to reports on the Supreme Court hearing, it appeared unlikely the banks would gain the required majority votes needed to rule favorable on the bank’s behalf. Such a vote would allow the lawsuit to proceed.
However, the group filing the lawsuit have a long time to wait for the Court’s ruling as it is won’t be handed down until June, 2017. Whichever way the ruling is made it will set a precedent for similar lawsuits filed by other cities like Los Angeles and Oakland in California, that suffered large percentages of foreclosures resulting from banking practices that lead to the housing crises that began in 2008.
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