Cleveland, Ohio has filed a lawsuit against 21 major financial institutions, holding them responsible for the collapse of the city's housing market. Mayor Frank Jackson charges that aggressive subprime lending by banks including Citigroup, Bank of America, Goldman Sachs, and HSBC drove foreclosures from 120 in 2002 to 70,000 last year.
The city is seeking hundreds of millions of dollars to cover demolition of abandoned properties, neighborhood cleanup, increased policing costs, and lost property tax revenue. Jackson argues the banks profited while ordinary residents were left unable to meet mortgage payments, particularly after low introductory interest rates reset sharply upward.
Cleveland, a former industrial center on Lake Erie whose population has fallen from roughly 950,000 to around 450,000, says abandonment has fueled crime and blight across entire neighborhoods. Citigroup firmly denies the allegations.
Legal experts and community advocates have expressed doubt about the lawsuit's prospects. A Case Western Reserve law professor noted that lender practices were generally legal. Separately, a local housing nonprofit director suggested the mayor was responding to constituent pressure rather than acting proactively, noting that some targeted mortgage companies have already gone out of business.
Historical summary. TurkishPress restated this wire report, first published in January 2008, in its own words.