Cities sue home lenders

USA Today reports:

Valeria Golebiowski moved to the Hawthorne neighborhood 45 years ago, and she's staying even as it crumbles around her.

Golebiowski, 72, remembers when flower gardens bloomed and neighbors chatted over coffee. Eleven of the 13 houses that once made up her block are vacant, condemned or demolished — victims of a foreclosure crisis that walloped this north Minneapolis neighborhood on the Mississippi River.

A city plan to redevelop the neighborhood stalled over 415 31st Ave. North, a decrepit, long-vacant bungalow in the middle of the block. In October, CitiMortgage foreclosed on the house.

The Hawthorne Area Community Council then sued CitiMortgage in January, saying the lender had approved an inflated mortgage on the property and created a nuisance by failing to fix it up after foreclosure.

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