Marla Kanemitsu's blog

The public nuisance theory is already expanding into the subprime mortgage context. Earlier this year, the City of Cleveland sued 21 financial institutions, including Ameriquest, Bank of America, Citigroup, and J.P. Morgan Chase, among others, alleging that the defendants’ “sub-prime lending abuses” created a foreclosure crisis that has imposed “tangible costs” on the city, including increased fire and police expenditures associated with vacant properties, demolition costs, and lost tax revenue. The city claims the foreclosures constitute a “public nuisance” and seeks compensation from the banks for the city’s losses.  Read More »