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» VISIT US ONLINE @ DSNEWS.COM 89 "Adding Lenders Title Solutions and its very experienced and talented group of people fits that mold. is move is good for us and good for the people and clients that we serve." How "Bank of America v. Miami" May Impact Servicers DS News spoke with an industry real estate law firm in Florida to discuss Bank of America v. Miami which poses the question, "Can financial institutions be sued by Mu- nicipalities under the Fair Housing Act?" What is the question being posed in the case Miami v. Bank of America? Starting in 2013, the city of Miami brought claims against Bank of America, Wells Fargo, and a few other banks in sepa- rate cases. e city of Miami claimed that these banks were engaging in two distinct practices that were problematic. e first being redlining and the second being reverse redlining. e city claimed that they could have a cause of action under the Fair Hous- ing Act because they were an "aggrieved person." is term is used to describe who can bring a claim there under. e banks argued in each of these cases that the city was not an "aggrieved person." e city's claim is that they lost tax revenue because of these practices. Because of this the city claims that subsequently there would be one foreclosure after another due to these prac- tices and that would in turn decrease home price. e decrease home prices would then cause blight and this blight would ultimately decrease home values to such an extent that tax revenue off of those home values would itself decrease. e city claimed that it was harmed because it lost that tax revenue. at harm, the city claims, made it an aggrieved person under the Fair Housing Act. So the question in the case is really who can bring a claim under the Fair Housing Act and under what circumstances. What implications will this case have on servicers? ere are a couple of implications that are possible. e first is that if the city is ultimately able to sustain its Fair Housing claim without having to prove that there was a zone of interest calculation that the city met, then other parties will be able to sue servicers and banks based upon Fair Housing claims. It wouldn't then simply be someone who has actually suffered the discrimination or someone that is fighting the discrimination, but it would instead be anyone that is tangentially effected by the discrimination. is means that servicers and banks would be open to lawsuits from a greater variety of plaintiffs with respect to the same loan, mortgage, and property. It would also mean that there maybe increased class actions against banks and servicers and increased exposure. On the other hand, if all of those po- tential parties are plaintiffs it may limit the ability of some of them to file class actions because there is a commonality element to the aggrieved parties in the class action. If you have different types of parties who would have suffered different types of inju- ries from the same conduct, it is sometime difficult to certify a class. It may make certification more difficult to occur. Additionally, a municipality is a larger entity than will likely bring in a Fair Hous- ing claim. is Fair Housing claim is a little more high tech than what would usually be seen. If that is the way that they are typi- cally litigated because now bigger entities are bringing Fair Housing claims, it may actually lower the scope of Fair Housing claims that actually succeed. Plaintiffs in Fair Housing cases at the federal level will potentially in the judge's eyes be held to a higher standard because the courts are used to these bigger entities litigating these cases because these entities can afford more and better attorneys. THE LEADER IN DEFAULT SERVICING NEWS Help shape the next issue of DS News. Drop us a line at Editor@DSNews.com. The number of completed foreclosures during the past 12 months in Florida. Source: CoreLogic STAT INSIGHT 53,000

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