Will a New Lawsuit Force 'Slumlord' US Bank to Cleanup Its Act?
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."