L.A. Sues U.S. Bank For Letting Foreclosures Fall Into Disrepair

When a lender forecloses on a home, it becomes responsible for keeping the property safe and reasonably kept-up. But officials in Los Angeles has accused U.S. Bank of ignoring hundreds of foreclosures as they fall into disrepair and/or become taken over by squatters and street gangs.

Yesterday, the city sued U.S. Bank, saying the lender had screwed up the handling of around 1,500 foreclosures in L.A., 150 of which had fallen into disrepair.

Additionally, the complaint alleges that U.S. Bank illegally evicted some tenants in foreclosed-upon properties, while leaving tenants in other buildings to live in poor conditions.

Los Angeles has already sued Deutsche Bank over similar allegations. Both U.S. Bank and Deutsche Bank insist that, though they may own the actual deeds to the foreclosures, the mortgage servicing companies are the ones responsible for the upkeep of homes and properties.

“Like the city attorney, we are troubled by properties that are not maintained, which have a corrosive impact on neighborhoods and communities,” a U.S. Bank Senior Vice President tells the L.A. Times, adding that the bank has “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.”

The city disagrees.

“U.S. Bank National Assn. 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,” reads the complaint.

Almost exactly a year ago, U.S. Bank was called out for allowing its foreclosures in NYC to fall into disrepair, all while not paying thousands of dollars in fines levied by the city for safety violations.

L.A. sues US Bank over blighted, abandoned homes


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  1. tasselhoff76 says:

    “This is part of the problem with scams that involve wire transfers. Authorities know that a crime has been committed, but if there has been no actual loss, no one seems that interested in putting in the effort to investigate.”

    It’s actually worse than that. We had a former FBI agent being taken in by fraudsters and he was sending large amounts of wire transfers overseas but the law enforcement agencies don’t have the manpower or time to try and shut all of these scammers down. Even for a career FBI man, the FBI just didn’t have a system in place for such “small” amounts.

    • tasselhoff76 says:

      This comment does not belong here at all. When I signed in, it brought me to this post instead of the one I had been on previously. Sorry, everyone.

  2. Westmont says:

    Banks loaned on houses in bad condition, even uninhabitable houses such as the leaning house in NY, and the one with the open sewer in the basement of my colleague (B of A did that, at 50% of his best income). The point: blight conditions aren’t necessarily recent .
    Banks should be sued for contract law violation in entering a loan—-for other reasons too—- knowing the collateral was a sink hole, using their experience & knowledge to take advantage of the complexity of a house asset.