(Adds other cities' lawsuits, paragraphs 8-9)
By Jonathan Stempel
May 30 (Reuters) - The City of Los Angeles has sued JPMorganChase & Co, accusing the largest U.S. bank of engagingin discriminatory mortgage lending practices that drove upforeclosures among minority borrowers.
The lawsuit on Friday is part of the second most populousU.S. city's effort to hold mortgage lenders liable for lostproperty tax revenue caused by falling home values, and the costto maintain vacant foreclosed properties.
"LA continues to suffer from the foreclosure crisis - fromblight in our neighborhoods to diminished revenue for basic cityservices," City Attorney Mike Feuer said in a statement. "We'refighting to hold those we allege are responsible to account."
The complaint filed in Los Angeles federal court accusedJPMorgan of engaging in a "continuous pattern and practice ofmortgage discrimination" in the city since 2004.
It said the New York-based bank's practices includedredlining, where minority borrowers are denied credit on thesame terms as other borrowers, and reverse redlining, whereborrowers in minority neighborhoods are flooded with subprimeloans they cannot afford despite qualifying for better terms.
"We are disappointed the L.A. City Attorney is pursuing anadversarial approach to address city finances impacted by therecent economic downturn," JPMorgan spokesman Jason Lobo said ina statement. "The downturn was beyond our control." The banksaid it would defend itself against the lawsuit.
Los Angeles in December filed similar lawsuits against Bankof America Corp, Citigroup Inc and Wells Fargo &Co, the next three largest U.S. banks. Wells Fargo onWednesday lost its bid to dismiss its lawsuit.
Cook County, Illinois, which encompasses Chicago, has filedsimilar lawsuits against Bank of America and HSBC Holdings Plc, while Providence, Rhode Island on Thursday sued a unitof Spain's Banco Santander SA.
Baltimore, Cleveland and Memphis, Tennessee are among othercities to bring similar cases against banks. Atlanta-areacounties have also sued HSBC.
Los Angeles said JPMorgan loans made from 2004 to 2011 inpredominantly black or Latino neighborhoods were 2.19 times morelikely to go into foreclosure than loans in mainly white areas.It said loans to minority borrowers went into foreclosurefaster.
Part of the case was based on confidential statements fromformer JPMorgan employees.
One, a former mortgage loan officer, accused the bank ofrefusing to help struggling borrowers, and instead often "justwaiting for the sheriff to come around" and foreclose.
There were about 200,000 foreclosures in Los Angeles from2008 to 2012, causing the loss of $78.8 billion in home values,the complaint said.
Last June, Deutsche Bank AG settled a lawsuit inwhich Los Angeles accused it of letting hundreds of foreclosedproperties deteriorate into slum conditions.
The case is City of Los Angeles v. JPMorgan Chase & Co etal, U.S. District Court, Central District of California, No.14-04168. (Reporting by Jonathan Stempel in New York; Editing by GrantMcCool)
HSBC Holdings (HSBA)
