LA City Attorney Sues US Bank Over Blight

Are banks and servicers
responsible for blight?

In yet another angle that purports to expand the responsibility of banks, the LA City Attorney has sued US Bank and Deutsche Bank for, in effect, being a slumlord.  “City officials say they want to hold banks that helped fuel the housing boom responsible for the blight that rippled through the city after those loans went bad.” 

US Bank Senior Vice President Tom Joyce was quoted in the article as referencing loan servicers as  "responsible for the upkeep of homes and properties and for interacting with homeowners and/or tenants."

Oakland has instituted a blight program that would require banks to register, inspect and maintain homes that are in foreclosure. Cleveland has been using a land bank program to tear down foreclosed homes.

Read the Los Angeles Times story