Cleveland Takes its Fight Against Wall Street to the Supreme Court

We’ve previously written about Cleveland’s lawsuit against 21 big banks over the mess that was created by the foreclosure crisis.

This article in Cleveland Scene summarizes the case nicely:

“The case against the banks isn’t a class action about individual homeowner losses, or whether they were tricked into signing commitments they couldn’t keep. (Attorney Joshua) Cohen knows that’s a common misunderstanding. Instead, it’s about the big picture from the city’s point of view — an attempt to recover money Cleveland has been forced to spend cleaning up the mess Wall Street left behind.

The foreclosed homes often end up as abandoned, ugly board-ups that are a haven for crime. The city is left to mow the grass when neighbors complain about rodents. The police end up dealing with festering drug problems. All of that costs money. And ultimately, the city must demolish thousands of these derelict properties at a cost of $7,000 each or more. But Cleveland is not alone: A similar case filed by the City of Buffalo, New York, claims the maintenance, police attention, and eventual demolition of foreclosed homes totaled as much as $16,000 per building. Of course, Buffalo was left holding the tab.

‘Was it irresponsible lenders or borrowers?’ Cohen asks rhetorically. ‘You could argue that until the cows come home. But whatever conclusion you reach, Cleveland was an innocent bystander. It’s amazing to me that the financiers have not been called to answer for this in any meaningful way.'”

Where does the case, filed in 2008, stand now?

Headed for a long-shot run at the US Supreme Court.

In addition to Cleveland, similar suits have been filed by Buffalo, Cincinnati, Baltimore and Memphis, the article states.

-KG

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Filed under Editorial, Real Estate, The Housing Crisis

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