California Federal Judge Allows Second Los Angeles Fair Housing Case To Proceed

Fair Housing Disparate Impact Predatory Lending

On June 9, the U.S. District Court for the Central District of California denied a mortgage lender’s motion to dismiss the City of Los Angeles’s Fair Housing Act suit, the second such denial by the same judge in recent weeks. Los Angeles v. Citigroup, Inc., No. 13-9009, 2014 WL 2571558 (C.D. Cal. Jun. 9, 2014). The case is one of several the city has filed alleging that certain mortgage lenders engaged in predatory lending in minority communities, the allegedly predatory loans were more likely to result in foreclosure, and that foreclosures allegedly caused by those practices diminished the city’s property tax base and increased the costs of providing municipal services. The instant order adopts the court’s prior holdings on all of the overlapping arguments presented by the lenders in the two cases. In addition, the court rejected the additional argument that the city’s suit was time barred because the city was on notice of its claims as early as November 2011 when it invited a law firm to “present proposed FHA litigation against ‘several large banking institutions.’”