Predatory lending lawsuit - CBS46 News

Predatory lending lawsuit

Posted: Updated:
Source: WGCL Source: WGCL

Before the mortgage meltdown of 2008, the Pittsburgh neighborhood of Atlanta had high hopes for a resurgence. But all that changed overnight.

“This is a just a prime example of Pittsburgh,” said Devon Holloway, as he escorted our TV crew down his street.  “Vacant and abandoned home after vacant and abandoned home.”

Houses on Holloway’s block that are boarded up and worthless today were selling for a quarter million dollars ten years ago.

“Back in ’07, my house sold for about 230-thousand dollars,” Holloway said.  “Last year, I bought this house for about 95-thousand.  But the person (I purchased if from) bought it in 2013 for 13-thousand.”

Holloway is one of many who believe that Atlanta should join other cities across the country and sue the banks accused of the predatory lending ..that killed communities everywhere.

“The cities and the counties need to aggressively make these banks give back to these communities, so we can have sustainable communities again,” Holloway said.

Protestors assailed lenders for years for their role in the housing collapse, and several Georgia municipalities have already taken them to court for losses to the tax digest, among them Cobb, DeKalb and Fulton counties, who see the Supreme Court’s decision as a big win for them.

“We have suffered from it in terms of foreclosures and the impact on our tax digest,” said John Eaves, the Fulton County Commission Chairman.  “We’re certainly monitoring the situation and certainly see this as a potential opportunity for us to really seek some damages that have been incurred by our county.”

DeKalb County Commissioner Jeff Rader says the ruling bodes well for the local counties’ lawsuit against the banks they believe were guilty of predatory lending.

“DeKalb expects to be able to show that the bank's intentional actions directly caused increased cost of service delivery to areas of the county distressed by foreclosures, and an erosion of the tax base that generates the funds to deliver those services,” Rader said in an email to CBS46 News.

But the city of Atlanta, so far at least, is sitting this one out, preferring diplomacy and negotiation to litigation.

“We have the same goals the banks,” said Atlanta city councilman Michael Bond.  “they want to sell the properties; others want to develop the properties.  We want families in those homes, and so I believe we can work cooperatively with our corporate partners to make sure that happens.”

The Supreme Court case involved the city of Miami suing Bank of America and Wells Fargo.

Tom Goyda, a spokesman for Wells Fargo said in a statement that “We believe that under the stringent standards articulated by the Supreme Court, it will be very difficult for Miami or any other municipality to show the required connection between the claimed damages and unsubstantiated allegations about our lending practices, which do not reflect how we operate in the communities we serve.”

Goyda added that Wells Fargo donated five million dollars to non-profits in Atlanta, and pumped millions more in loans to a Midtown housing development for low-income seniors.

Lawrence Grayson, a spokesman for Bank of America, added that “Bank of America is committed to the goals and intent of the Fair Housing Act. We believe these claims are without merit, and we will continue to defend our interests in this matter.”

The bank says it donated four million dollars to non-profits in Atlanta in 2016.

Copyright 2017 WGCL-TV (Meredith Corporation). All rights reserved.