UPDATE 1-Miami's mortgage discrimination suits against Citi, Wells dismissed

Thu Jul 10, 2014 4:36pm EDT

(Adds comment from Citigroup)

By Dena Aubin

July 10 (Reuters) - A federal judge has dismissed mortgage discrimination lawsuits filed by the City of Miami against Citigroup Inc and Wells Fargo & Co, following the dismissal of a similar lawsuit against Bank of America Corp earlier this week.

On Wednesday U.S. District Judge William Dimitrouleas dismissed the city's claims against Citi and Wells under the U.S. Fair Housing Act. He referred to his reasoning in the Bank of America case, where he said Miami lacked standing to sue.

Miami had sued the three banks in December, accusing them of causing a flood of foreclosures in minority neighborhoods during the last decade's housing crisis by giving borrowers high-cost mortgage loans they could not afford.

The city sought damages under the 1968 Fair Housing Act for lost property tax revenue because of a decline in home values and for extra city expenses in blighted neighborhoods.

"We are pleased with the court's ruling," Citigroup spokesman Mark Rodgers said. "Citi is proud of its deep commitment to make sure our lending standards are fair to all of our customers."

Wells Fargo spokeswoman Catherine Pulley said the bank is pleased with the ruling and will continue working to expand home ownership and revitalize distressed neighborhoods.

A spokesman for Miami could not immediately be reached for comment.

In his dismissal of the Bank of America case, Dimitrouleas had said that the city's claims were not covered by the Fair Housing Act, which was passed to prevent discrimination and assure fair housing across the country.

The judge said Miami's claims were only "marginally related" to the purpose of the act.

The city's alleged harm was also too remote from the bank's conduct to bring a suit, Dimitrouleas said.

A similar lawsuit filed by Miami last month against JPMorgan Chase & Co is still pending. The bank has not yet filed a motion for dismissal.

The cases are City of Miami v Wells Fargo & Co, Case No 13-cv-24508, and City of Miami v Citigroup, Case No 24510, both in U.S. District Court for the Southern District of Florida (Reporting by Dena Aubin in New York; Editing by Kevin Drawbaugh and Lisa Shumaker)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.