LOS ANGELES – The Los Angeles city attorney is suing Wells Fargo and Citigroup, alleging the companies engaged in mortgage discrimination that led to a wave of foreclosures in minority communities.
The federal lawsuits filed Thursday are the latest fallout from the 2008 housing bubble collapse.
They claim Wells Fargo & Co. and Citigroup Inc. first refused to grant mortgages in minority neighborhoods — a practice known as redlining — then later targeted minority consumers for predatory loans.
The lawsuits claim that led to foreclosures that sent property values tumbling in black and Hispanic neighborhoods, costing the city hundreds of millions of dollars in taxes and forcing it to spend perhaps $1 billion to clean up and protect vacant properties.
Wells Fargo and Citigroup say they're committed to fair lending and call the suits baseless.