In a case held in abeyance during the pendency of CCL’s successful Eleventh Circuit appeal on behalf of the City of Miami, Florida, the City of Miami Gardens filed an amended complaint, asserting that Wells Fargo Bank had violated the Federal Housing Act by steering minority borrowers to more expensive and riskier loan products than they qualified for, resulting in foreclosures of properties, the loss of tax revenues for the city, and additional expenses in remediating neighborhoods and properties in the areas of the city affected by foreclosures. In response, Wells Fargo made a motion to dismiss the amended complaint, arguing that the handful of loans identified as within the statute of limitations period had not yet created any damage to the city and, thus, did not qualify as being within the statute of limitations.  In the alternative, the Wells Fargo motion sought a more definite statement.

In a responsive brief filed by CCL October 26 on behalf of Miami Gardens, CCL argued that the FHA states that the limitations period does not begin to run as long as the impermissible conduct continues. Thus, any improper steering that continues into the limitations period satisfies the statute of limitations and allows prior loans to come within the limitations period for consideration by the court. In addition, the brief points out that the average length of time between a loan closing and foreclosure in these situations is greater than three years. As a result loans within the two-year statute of limitations period are unlikely to move into foreclosure. Besides, the brief points out, it is the misconduct and not the damage that is examined for statute-of-limitations purposes.  The brief was written by CCL’s Valerie Nannery and Robert S. Peck, Joel Liberson of Trial and Appellate Resources, and Lance Hartke and Sara Clasby Engel of Harke Clasby & Bushman.