US Bank has agreed to pay $13.5 million to the city of Los Angeles for allowing hundreds of foreclosed homes to fall into disrepair in recent years, the City Attorney’s office announced Thurday.
The city sued the bank in 2012, when it owned more than 1,500 properties in Los Angeles that had been acquired through foreclosure. Prosecutors accused US Bank of ignoring multiple requests from the city to maintain a number of these homes and bring them into compliance with city codes.
Many of the homes cited in the 2012 suit are in low-income areas, where then-City Attorney Carmen Trutanich argued they were helping to create “slum conditions.”
Announcing the settlement, City Attorney Mike Feuer indicated LA will hold banks accountable for keeping their properties in decent shape. “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,” he said.
Since the 2008 recession, banks across the country have foreclosed on millions of homes, and many have sat vacant for years. In 2010, the city of LA instituted a program fining banks for allowing properties to deteriorate, but it turned out to be nearly impossible to enforce.
Now, the city has gone after the worst offenders, also reaching a $10 million settlement with Deutsche Bank in 2013. The City Attorney’s office also rolled out a plan last year to fix up bank-owned homes and get them sold, with the program being funded from the sale of the homes.
Under this newly-reached settlement, US Bank will be responsible for maintaining its LA properties for the next two years and will need to hire a full time employee to work with the city in bringing the homes up to code.
- Los Angeles Will Fix Up Blighty Foreclosed Houses and Force Banks to Sell Them [Curbed LA]
- Mapping the 4,300 Homes in the LA Foreclosure Registry [Curbed LA]
- Foreclosures Are Back With a Vengeance in Los Angeles [Curbed LA]