U.S. Bancorp (USB:US)’s U.S. Bank unit has become one of Los Angeles’s biggest slumlords by letting hundreds of foreclosed homes fall into disrepair, city officials said in a court filing.
In the past four years, the bank has become the owner of more than 1,500 residential properties in the city that it acquired title to as the trustee for mortgages that were held in mortgage-backed securities, the city attorney said in a civil law enforcement action filed yesterday in California state court in Los Angeles.
The city accused the bank of violating California’s unfair competition law and the Los Angeles municipal code. It seeks $2,500 a day for each violation.
“Such unlawful, unfair and fraudulent business acts and practices by defendant U.S. Bank National Association has resulted in the creation and maintenance of hundreds of substandard, uninhabitable occupied and vacant nuisance properties; public nuisances; and the unlawful eviction of hundreds of tenants,” Los Angeles City Attorney Carmen Trutanich said in the complaint.
Last year, Trutanich sued Deutsche Bank AG, accusing it of failing to maintain foreclosed properties and illegally evicting low-income tenants. The cities of Memphis, Tennessee, Baltimore and Cleveland also have sued banks to recoup their costs of maintaining foreclosed and abandoned properties.
Teri Charest, a spokeswoman for Minneapolis-based U.S. Bancorp, said yesterday in an e-mailed statement that other companies are responsible for servicing the mortgages, including maintenance of the foreclosed properties and compliance with the city ordinances. The bank intends to bring the servicers into the lawsuit, Charest said.
“We have worked collaboratively with other cities to engage servicers to address property-specific and general foreclosure related concerns,” Charest said. “We have made similar offers to the city attorney’s office, and we continue to stand ready to implement such an approach with the city of Los Angeles.”
The case is the people v. U.S. Bank National Association, BC488436, California Superior Court, Los Angeles County.
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