Los Angeles officials have accused US Bank of being one of the city’s largest “slumlords” and filed a civil suit against it worth potentially “hundreds of millions of dollars” for its handling of 1,500 foreclosed residential properties.

City Attorney Carmen Trutanich accused the bank of ignoring demands that it do something about the uninhabitable “public nuisances” it owns and curtail behavior that has resulted in hundreds of tenants being evicted from their homes.

US Bank maintains that the properties are owned by trusts and its only role is handling administrative details. “The city attorney is alleging that we are somehow owners of these homes,” Lee Mitau, an executive US Bank’s parent, US Bancorp, told the Associated Press. “We're not the owners . . . and don't have the ability to force the loan servicers to maintain these properties.”

The city disagrees. “When you own a piece of property, you're at the top of the food chain and you can try to deflect and say someone else is responsible, but you're the owner,” Trutanich said.

The city filed a similar lawsuit in May 2011 against Deutsche Bank and its subsidiaries, which had title to more than 2,000 local residential properties. Deutsche Bank also maintains that loan servicers, not the bank, are the contractually responsible parties. “The Los Angeles City Attorney's Office has filed this lawsuit against the wrong party,” the bank said at the time.

The US Bank lawsuit, filed in Los Angeles Superior Court Monday, focuses on 170 properties as examples of what it claims to be illegal behavior. In a press release, the city attorney alleged violations of federal, state and municipal laws regarding housing conditions, tenancies and nuisance properties. The city is demanding a complete inventory and inspection of all foreclosed properties and a stop to all illegal evictions.

The lawsuit also seeks compensation to current and former tenants for unpaid relocation fees and excessive rent. For itself, the city wants payment for inspections, repairs and penalties.

The lawsuit alleges that US Bancorp used intermediaries, including lawyers and realtors, to engage in deceptive and dishonest tactics to evict tenants and failed to provide minimum maintenance to its properties. Those properties are mostly located in low-income neighborhoods in south Los Angeles and the San Fernando Valley.       

–Ken Broder

To Learn More:

Los Angeles Sues US Bancorp, Calls Bank a Slumlord (by Jonathan Stempel, Reuters)

California Calls U.S. Bank a “Slumlord” (by Matt Reynolds, Courthouse News)

L.A. Sues US Bank over Blighted, Abandoned Homes (by Jessica Garrison and Angel Jennings, Los Angeles Times)

LA Prosecutor Calls US Bank a Slumlord in Lawsuit (by Robert Jablon, Associated Press)

LA Sues Deutsche Bank over Foreclosure Blight (by Dan Levine and Edward Taylor, Reuters)