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January 18, 2008
City of Cleveland Sues 21 Subprime Lenders
Cleveland has become the second city in two weeks to blame Wall Street for causing a subprime fallout that eventually led to a surge of foreclosures in the city. But, to date, Cleveland is the only local municipality taking the dramatic action of including 21 lenders in a lawsuit that accuses Wall Street companies of violating the “rights and interests” of residents by issuing and backing irresponsible loans.
The suit is filed under a long-standing public nuisance legal concept, which allows communities to recover losses caused by harmful and destructive behaviors in the marketplace.
Posted by S. Germain at January 18, 2008 08:06 AM