L.A. city attorney lawsuit: Deutsche Bank among city’s largest slumlords, files suit seeking hundreds of millions of dollars

The Los Angeles city attorney's office accused officials at Deutsche Bank, a German financial institution, of being among "the largest slumlords in Los Angeles" and filed an unusual lawsuit Wednesday asking a judge to fine the company hundreds of millions of dollars and issue an injunction forcing it to clean up the foreclosed properties it owns in Los Angeles, which have numbered 2,000 over the last four years.


After a yearlong investigation, city officials claimed in court papers that Deutsche Bank has illegally evicted tenants, shut off their water and power and then let hundreds of properties turn into graffiti-scarred dens for squatters, gang members and other criminals, destroying quality of life and driving up crime in the process.

[Updated at 10:34 a.m.: “The Los Angeles city attorney’s office has filed this lawsuit against the wrong party," Deutsche Bank spokesman John Gallagher said in a statement. "As we have repeatedly advised the Los Angeles city attorney’s office, loan servicers, and not Deutsche Bank as trustee, are contractually responsible for both the maintenance of foreclosed properties and any actions taken with respect to tenants of foreclosed properties.

"For over a year, we have offered to help the Los Angeles city attorney's office contact the loan servicers that are responsible for maintaining the properties in question," he continued, "but they have refused our help and would not even tell us which properties they were talking about.”]

City officials say the bank, which invested heavily in mortgage-backed securities, found itself "transformed ... from detached investment brokers ... to large-scale residential property owners, a role whose responsibilities ... they have completely eschewed."

If successful, city officials said, the suit would be the first of its kind in the U.S. in which a city was able to collect penalties and restitution from banks for the havoc that foreclosures have wrought.

http://latimesblogs.latimes.com/lanow/2011/05/la-says-deutsche-bank-among-citys-largest-slumlords-files-suit-seeking-hundreds-of-millions.html?lanow


Here is the lawsuit. Here and here.