Los Angeles city attorney sues US Bank

The US Bank building in St. Paul
The US Bank building in downtown St. Paul. Tom Joyce, US Bank senior vice president of corporate public relations, said the charges in the lawsuit bythe Los Angeles city attorney are "patently false." Joyce said US Bank is just a trustee in investment trusts that own the homes cited in the city attorney's complaint.
MPR Photo/Steve Mullis

The Los Angeles city attorney filed suit Monday against US Bank, arguing that the Minneapolis-based company neglected foreclosed properties and illegally evicted homeowners.

The city attorney's office hopes to force US Bank to stop what it calls illegal evictions and comply with all government regulations and codes. The office is also asking that residents of properties foreclosed on by the bank be paid restitution, and that US Bank reimburse the city for the cost of foreclosed home repairs and inspections.

Los Angeles City Attorney Carmen Trutanich said there's "a whole series of nefarious conduct.''

"US Bank has obligations like everyone else who owns property," Trutanich said. "If you neglect your duties as a property owner, then the city of Los Angeles will hold you responsible."

Tom Joyce, US Bank senior vice president of corporate public relations, said the charges in the lawsuit are "patently false."

Joyce said US Bank is just a trustee in investment trusts that own the homes cited in the city attorney's complaint.

"The city attorney, quite frankly, in Los Angeles has chosen the wrong party," Joyce said. "We're not the owners of any of the properties listed in the lawsuit. Nor are we responsible for servicing any of the properties that are listed."

Joyce said US Bank's role in the 1,500 properties cited by the city is "purely administrative." He said the company receives a fee for its role as trustee and will defend itself "vigorously."

"We have no role in foreclosing on the homes," Joyce said. "In fact, we would never even learn if there's any building or code violations on the properties."

City Attorney Trutanich said the trustee of a property becomes the owner when a property is foreclosed.

"That's a legal change. As owner you end up with not only the rights of property, but also the burdens of property," Trutanich said. "The burdens are you have an obligation to maintain that property pursuant to the laws to the state of California. They failed to do that."

Trutanich said some Los Angeles neighborhoods, like in south Los Angeles where he said many US Bank-owned homes are located, have been devastated as banks neglected foreclosed homes.

"When you have one of these properties and other properties begin to go upside-down, pretty soon you have two, three," Trutanich said. "All of the sudden, a neighborhood that was once residential, a place where kids played... the quality and the character of that neighborhood has changed dramatically."

The Los Angeles city attorney's office filed a similar suit against Deutsche Bank last year. Since then, Trutanich said the city has seen more banks start to maintain foreclosed properties. That case is still in court.

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