L.A., U.S. Bank reach $13.5-million settlement on foreclosed homes in disrepair
The Los Angeles city attorney has reached a $13.5-million settlement with U.S. Bank to resolve allegations that the nation’s fifth largest bank operated as a slumlord and allowed hundreds of foreclosed properties to deteriorate, fostering crime and blight in L.A. neighborhoods slammed by the housing crisis.
The settlement, announced Thursday, requires the Minneapolis-based firm to maintain its foreclosed properties in “accordance with all applicable laws and standards for two years.” A full-time bank employee will work with city agencies to resolve code violations of foreclosed properties across Los Angeles, the city attorney’s office said.
“Banks must be accountable for the condition of the properties they hold,” City Atty Mike Feuer said in a statement. “This significant settlement underscores my commitment that all foreclosed and vacant properties be kept up to code, so they don’t become sources of blight or magnets for crime.”
The settlement stems from an effort by former City Atty. Carmen Trutanich to hold banks accountable for foreclosed properties that became dens of squatters and drug addicts following the housing collapse. That problem was not unique to Los Angeles after the housing bubble popped and the economy tanked, forcing people from their homes when they couldn’t make payments