Jessica Garrison and Angel Jennings report on a new lawsuit filed this week by the City of Los Angeles that is part of "an aggressive attempt to deal with the urban decay caused by the housing crash."
Marking the second time the City of Los Angeles has gone after a major bank for being a slumlord, officials announced civil allegations this week that, "found problems in the way US Bank handled 1,500
home foreclosures and cited more than 150 homes that had fallen into
disrepair. The city is demanding that the bank clean up vacant
properties and improve conditions for families living in others."
According to Garrison and Jennings, "City officials say they want to hold banks that helped fuel the housing
boom responsible for the blight that rippled through the city after
those loans went bad."
"[S]eeking an injunction and potentially millions of dollars in
penalties and restitution from the Minneapolis-based financial
institution," the approach being pursued by Los Angeles is novel, but may set a precedent for cities seeking creative ways to deal with problems resulting from foreclosures.
"Deutsche Bank and US Bank have argued that the blame for neglected,
foreclosed homes lies not with them but with loan servicers, who are
contracted to manage the properties."
FULL STORY: L.A. sues US Bank over blighted, abandoned homes
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