Cleveland Sues 21 Mortgage Lenders

The city of Cleveland has sued 21 lenders and Wall Street firms involved in the subprime mortgage market, seeking monetary damages under a "public nuisance law." The litigation is the latest in a series of municipal actions targeting lenders. The Cleveland lawsuit alleges that the lenders "financed and cultivated" the subprime market, leading to a foreclosure crisis that has proved costly for the city. Bank of America, Citigroup, Deutsche Bank, J.P. Morgan Chase, Merrill Lynch, Bear Stearns, Ameriquest, Washington Mutual, Countrywide Financial Corp., Morgan Stanley, Wells Fargo, Fremont General Corp., GMAC-RFC, Goldman Sachs, Greenwich Capital Markets, HSBC Holdings, IndyMac Bancorp, Lehman Brothers, NovaStar Financial, and Option One Mortgage were all named as defendants in the lawsuit.