The city of Los Angeles has filed a lawsuit against U.S. Bank, charging the Minneapolis-based lender with the problematic handling of 1,500 home foreclosures and citing more than 150 homes that had fallen into disrepair.
The Los Angeles Times reports that the city is demanding that U.S. Bank clean up the vacant properties on the foreclosed houses it owns and improve the living conditions for families in other properties held by the bank. The lawsuit follows an 18-month municipal investigation of U.S. Bank's activities in Los Angeles.
‘U.S. Bank National Association disregarded virtually every one of its legal duties and responsibilities as owner, resulting in the creation and maintenance of an alarming number of vacant nuisance properties,’ says the city in its lawsuit, adding that the bank was ‘repeatedly advised’ to address the problems but did nothing ‘to comply with the law.’
U.S. Bank responded to the lawsuit by stating it was not responsible for the derelict state of properties that it foreclosed on.
‘Like the city attorney, we are troubled by properties that are not maintained, which have a corrosive impact on neighborhoods and communities,’ says Tom Joyce, U.S. Bank senior vice president in a published statement. However, Joyce adds that the loan servicers that handled the foreclosures were the ones ‘responsible for the upkeep of homes and properties and for interacting with homeowners and/or tenants.’
Joyce also says that U.S. Bank ‘made multiple requests of the city over the past couple of years to obtain detailed information on properties they considered to be in disrepair in order to immediately identify and work with the responsible servicer to address outstanding issues. Until very recently, the city has refused to provide us with that information.’
This is the city's second lawsuit against a financial services company in regard to the upkeep of foreclosed properties. Last year, the city filed a lawsuit against Deutsche Bank.
