The city of Los Angeles is thirsty for justice. They recently added Bank of America (BofA) to their lawsuit against Wells Fargo and Citigroup Inc. for discriminatory lending practices, according to the Wall Street Journal.

Los Angeles alleges the Big Banks discriminated against minority borrowers by:

  • targeting low-income neighborhoods; and
  • peddling predatory loans to individuals with no proven ability to repay.

The city is seeking money damages since the banks’ predatory lending practices led to a foreclosure wave that severely diminished property tax revenues for the city.

While the city claims the banks acted with

“willful, wanton, and reckless conduct,”

BofA says they,

“responded with urgency to rising mortgage defaults that resulted from the country’s severe economic downturn and the personal financial hardships.”

Now, just take a closer look at BofA’s statement here for a minute. They argue they are not responsible for California’s foreclosure wave since it was caused by “the country’s severe economic downturn.” Do they think we are stupid?

What caused the country’s severe economic downturn? The excessive risk-taking, derivatives gambling and junk mortgage making that BofA (owner of Countrywide, may we remind you) perpetrated during the Millennium Boom!

We’ve got our fingers crossed that L.A. is successful with this suit. A successful judgment for money damages sets legal precedent and opens the door for any number of municipalities to go after the banks for diminishing revenues by causing foreclosures and severely diminished property values.

This lawsuit comes just weeks after the federal government found Bank of America (BofA) and Countrywide senior executive, Rebecca Mairone, liable for intentionally making bad loans during the 2000′s real estate bubble.

It appears as though the juggernaut of justice has finally started rolling. If the city of L.A. wins this suit, there will simply be no stopping it.