Local leaders consider lawsuit against predatory lenders
MEMPHIS, TN (WMC-TV) - Local leaders are considering if they should sue lenders accused of preying on African American home buyers.
The Memphis City Council and Shelby County Commission will soon vote if they should sue national mortgage lenders accused of preying on African Americans.
"You've got to live within your means, but at the same time banks should not take advantage of individuals seeking to buy homes with high interest rates," council member Myron Lowery said.
"It's worth it because of the lost revenue and it's also worth it to try to make some of these folks who had one pulled over on them whole again," Shelby County Commissioner Mike Carpenter added.
The 2008 Chandler Report shows the top ten zip codes with the highest foreclosure rates in Memphis and Shelby County. The 38127 zip code had the most foreclosures in 2008.
That's in Frayser.
"There are two points of interest," Carpenter said. "One is clearly to protect our citizens from these types of predatory lenders. The second though is from the standpoint of property tax collection purposes."
The city of Memphis alone averaged a thousand foreclosures a month. HUD and the state are giving Memphis City and Shelby County $27.6M to help solve the problem, but city and county leaders say a lot more money will be needed."
"We need to spend this money wisely and to prevent as many foreclosures as possible, even if it means going to court suing some banks," Lowery said.
Carpenter says many questions must be answered before court action, like how much a lawsuit would cost, and whether or not the state will agree to join the lawsuit.
City administrators will brief the Memphis City Council on the issue at Tuesday's meeting. Wednesday, Shelby County Commissioners will vote if they should sue.