LA settles foreclosure case with Deutsche Bank

The Associated Press
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(AP Photo)

LOS ANGELES (AP) – Los Angeles officials agreed to a $10 million settlement Friday in a lawsuit in which the city accused Deutsche Bank of allowing foreclosed properties to fall into disrepair.

The 2011 lawsuit sought hundreds of millions of dollars in penalties and restitution from the Germany-based bank, according to The Los Angeles Times.

The city blamed the bank when about 2,000 foreclosed homes in the San Fernando Valley, South Los Angeles and other areas fell into squalor, with many becoming graffiti-scarred dens for squatters and criminals.

City officials also accused the bank of illegal evictions in the lawsuit.

However, the bank admitted no wrongdoing in the settlement and has maintained that prosecutors were going after the wrong party. The bank said loan servicers are contractually responsible for maintenance of foreclosed homes, and they will be footing the bill for the settlement along with “the securitization trusts that hold the properties.”

City officials say the bank will ensure foreclosed properties are well-maintained in Los Angeles as part of the settlement.

In a statement issued Friday, bank officials said they were pleased to be able to “bring together the relevant parties to help facilitate a resolution.”

City Attorney Carmen Trutanich thanked the bank, saying in a statement that the problem had plagued the city for far too long.

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