Threat of foreclosure shakes economies of Florida cities

Threat of foreclosure shakes economies of Florida cities

Being able to pay one's mortgage is something many people take for granted. The threat of foreclosure has affected multiple families in southern Florida. These people have lost their security, and the city has experienced a collapse in the housing market. Several suits have been filed by one Florida city against some major banks for illegal lending practices.

These cases have taken a close look at the treatment of borrowers from minorities, such as African Americans and Latinos. The city claims that the banks have discriminated against borrowers from these minorities, which has cost the city millions as their housing market, and likewise tax revenue, has greatly diminished. This unfair treatment of minority residents infringes upon the protections set out in the federal Fair Housing Act.

Discriminatory practices include facing increased interest rates, a larger number of penalties and other terms that made it far more likely for non-Caucasians to fall into foreclosure. Some former bank employees testified, saying that employees often referred to loans for minority citizens in a derogatory manner. Since multiple southern Florida cities are made up of mostly minority residents, these prejudiced practices have heavily hurt their economies.

The threat of foreclosure can stem from many different circumstances. However, discrimination against minority homeowners is an illegal practice that costs many families their homes. Some cities that have been shaken by this practice are taking action against the banks that have severely hurt their economies and housing market. Florida is not the first state to file suits against major banks for this reason, but its stand against these practices can hopefully bring them to an end.

Source: motherjones.com, Miami and Los Angeles Sue Banking Giants Over the Sub-Prime Mortgage Debacle, Mariah Blake, Dec. 23, 2013