Cleveland Sues 21 Banks Over Foreclosure Mess

With foreclosures adding up, the City of Cleveland has sued 21 banks, claiming that the banks' subprime lending practices created a public nuisance that hurt property values and city tax collections, USA Today reported January 11, 2008.

It sounds like a stretch to me.

The lawsuit seeks to recover hundreds of millions of dollars in damages, including lost taxes from devalued property and money spent demolishing and boarding up thousands of abandoned houses.

Cleveland is not the first city to sue lenders over mortgage troubles. A few days earlier, the City of Baltimore sued Wells Fargo, alleging the bank intentionally sold more high-interest mortgages to blacks than to whites in violation of federal law. The city alleges that Wells Fargo targeted black neighborhoods for high-risk and unfairly priced loans. Wells Fargo denies the claim.

Read The USA Today Article