Racial Discrimination at JPMorgan Chase?

Early in 2010, stories of erroneous foreclosures began surfacing across the nation. While alarming at first, these stories became more and more common until the day came when almost every news station nationwide was covering the epidemic. Four years have passed since then, yet we still face many of the unresolved issues left in the wake of the foreclosure crisis. Recently though, the city of L.A. has been making an effort to combat these problems via a series of lawsuits against some of the mega lenders who are believed to have ignited the flame. Their most recent target – JPMorgan Chase.
discrimination
In a lawsuit filed on May 30, 2014, in U.S. District Court, the Los Angeles city attorney alleged that the nation’s largest bank “engaged in a continuous pattern and practice of mortgage discrimination in Los Angeles.” It’s believed that the bank has been imposing different terms or conditions on a discriminatory and legally prohibited basis since as early as 2004.

This newest lawsuit coincides with similar claims against banking giant Wells Fargo, which we covered in our recent story “Wells Fargo Faces Discriminatory Lending Claims”.

The JPMorgan suit claims the mortgage crisis resulted in over 200,000 foreclosures in Los Angeles from 2008 through 2012, a wave that depressed property values, in turn costing the city $481 million in property tax revenue and an additional $1.2 billion in safety inspections, police and fire calls, trash removal and property maintenance for those foreclosures.

The JPMorgan lawsuit, like the others, accuses the bank of placing minority borrowers into riskier loans than it did to “similarly situated” white borrowers. Those loans caused a disproportionate number of foreclosures in minority neighborhoods compared to white neighborhoods, according to the city.

That practice continues “through the present and has not terminated,” the city alleged.

A verdict has yet to be found in this matter, but what do you think about this suit?

You can read the full story here:

  • MarkBrant

    First Wells Fargo and now JPMorgan?! It’s good to hear that the city of Los Angeles is fighting back against those who’ve wronged the RE community!

  • RE_Insider

    We received this email from one of our readers on this story and he has given his permission to share his comments:

    Dear editor,

    For years I have found JP Morgan Chase a good place to do mortgage financing. I have never seen a wisp of evidence that they are discriminatory. In fact, I believe that they have gone out of their way to serve the less fortunate and minorities in purchasing homes.

    Chase, like so many other lenders, was caught up in the loose money era making loans to those who simply could not afford it. Those people were pushed into real estate transactions by ruthless real estate and mortgage agents, many times with the same person wearing both hats. The bank was aided and abetted by governmental coercion to make loans on an “as-stated” basis that were adjustable rate mortgages. The ruthless bunch encouraged the folks to go ahead because by the time the rate went too high, they would have made a lot of money from appreciation and could sell and get out.

    Well, all too sadly, we saw the results of that when the bubble burst from the unsustainable increase in home prices.

    No, I believe that this action is but another case of ​soak the rich, the ones with the deep pockets. Chase is a solid home finance company that should be honored rather than having to spend tons of money defending a legal action that should be thrown out of court.

    Please know that the thoughts expressed here are those of my own and do not necessarily reflect the views of Coldwell Banker or any of its officers, employees or affiliates in any way.

    Jack Markle, Broker Associate

  • sensibility1

    If these allegations are true, which I don’t think they are, why has the city of LA waited for 10 years? Also please stop blaming merely the banks for the housing crisis. Irresponsible borrowers are just as much to blame. It’s time for the federal government to regulate irresponsible borrowers and hold them accountable for their bad choices and decisions. To start with, take the possibility of strategic defaulting out of the picture.

  • Angela

    Individuals that have never been involved in discrimination of any sort can not fathom the issue at hand. Naturally you are not a minority based on your comments.