Lost Angeles City Attorney Mike Feuer announced recently that his office has reached a $13.5 million settlement with US Bank to resolve allegations for municipal code violations and other issues on hundreds of foreclosed properties in Los Angeles.
"Banks must be accountable for the condition of the properties they hold," said Feuer. "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."
US Bank will pay $11.9 million in civil penalties and $1.6 million to resolve Municipal Code violations. Additionally, the bank must maintain foreclosed properties in accordance with all applicable laws and standards for two years under terms of the settlement. US Bank has also agreed to designate one full-time senior employee to serve as a point of contact for city agencies regarding code violations at foreclosed properties owned by the bank.
Originally filed in July, 2012, by then City Attorney Carmen Trutanich, the civil complaint focused on 170 of the over 1,500 properties US Bank had acquired in Los Angeles through the process of foreclosure. The complaint alleged that despite repeated notices to comply and hearing notices from various city agencies, US Bank failed to respond and bring its properties into compliance.
However, officials for U.S. Bank argued at the time that Trutanich’s lawsuit targeted the wrong entity because the bank was merely acting as a “trustee” of the pool of loans related to the properties, rather than the “servicer” or company directly managing the loan.
Chief Deputy Jim Clark, Chief Assistant City Attorney Thomas Peters, Assistant City Attorneys Tina Hess and Michael Bostrom, and Deputy City Attorneys Suzanne Spillane, Ben Delfin, Miguel Bahamon, Travis Austin, George Sami, Janet Karkanen, Jessica Howell, and Jennifer Lam handled the litigation and settlement.
The settlement is subject to Court approval.