US banks sued over foreclosure policies

2 December 2011

Legal action is being taken against five major banks in the US on the grounds of their alleged unscrupulous foreclosure practices during the global economic downturn.

The state of Massachusetts has decided to sue Citigroup, GMAC, JP Morgan, Bank of America and Wells Fargo after claiming the financiers acted unlawfully when seizing homes throughout the recession.

According to attorney general Martha Coakley, these lenders had no jurisdiction or right to foreclose on "hundreds, if not thousands, of properties" in this period of financial uncertainty.

She explained the banks have caused "harm" to many residents in the state, meaning it is important they face the appropriate sanctions for their actions.

Ms Coakley went on to say the lawsuit has been filed to provide "real accountability" on the firms' "unlawful and illegal" seizures.

Recently, JP Morgan and the Bank of America were among a group of 15 major banks to be downgraded by Standard & Poor's.

By Claire Archer

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