A judge has dismissed a predatory lending lawsuit filed by the city of Birmingham, but the case could return to court if the defendant mortgage lenders don’t settle.

Circuit Judge Houston Brown this week dismissed the suit after the parties involved sought a joint dismissal. However, the suit will be refiled Feb. 5 against lenders who do not agree to a settlement, said Jere Beasley, whose firm represents the city.

Beasley said lawyers with Beasley, Allen, Crow, Methvin, Portis & Miles will begin negotiations with five mortgage lenders Thursday. He said he expects to know by Monday who would be named in the suit if it were refiled.

Any proceeds would be set aside in a fund for Birmingham residents who were victims of predatory mortgage lenders.
“We believe that the best approach is to set up this fund, which would really benefit citizens, and it would also indirectly benefit the city,” Beasley said.

In the November lawsuit, the city claimed lenders violated the federal Fair Housing Act. Wells Fargo, Countrywide Bank, Argent Mortgage Co. and others were named.

The filing spurred a feud between Birmingham Mayor Larry Langford and the City Council, with the mayor arguing it was premature and done without his authorization. Council members instructed the outside attorneys to continue with the suit, however.

Now, after some back-and-forth in court, it appears the council and mayor are on the same page, Council President Carole Smitherman said.

The city, which originally had a contract with another law firm, must now enter into a contract with Montgomery-based Beasley Allen. Deborah Vance-Bowie, the mayor’s chief of staff, said once the mayor receives the agreement it will go before the council for approval. Beasley said his firm would receive one-third of any money recovered, under the new deal.

Vance-Bowie added that the law firm agreed to work with local agencies to locate Birmingham residents who were victims of predatory lending.

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