Take Two®

News and culture through the lens of Southern California. Hosted by A Martínez

Cities can sue banks for predatory mortgage lending: Here's what that means for you

by Take Two®

33878 full
File: Renzo Salazar maintains the yard around a foreclosed home after the bank hired him to keep the home from falling into complete dilapidation on November 10, 2011 in Miami, Florida. Joe Raedle/Getty Images

The housing market collapsed in back in 2008, and many families here in Southern California saw their own homes collapse with it.

They were drowning because of risky mortgages peddled to them by some banks.

But just yesterday, the U.S. Supreme Court ruled that cities like L.A. can go ahead and sue banks for the damage they did.

"They have to show that there was some sort of fraud," says Richard Green, director of the USC Lusk Center for Real Estate. "And they need to show that neighborhoods were hurt because of the prevalence these practices."

There's a high bar to prove that connection, but if a city succeeds then the settlement could help with the public coffers, debt relief for people who took out the loans or more.

Listen to the full interview by clicking the blue audio player above.

blog comments powered by Disqus

Enjoy Take Two®? Try KPCC’s other programs.

What's popular now on KPCC