Local governments have been complaining for years that foreclosed homes are a blight on cities and counties, and that banks that take back homes often fail to maintain them. 

The California General Assembly is even considering a bill that would fine lenders $20,000 for each foreclosure to help cities pay the associated costs.

The city of Los Angeles filed suit Wednesday against Deutsche Bank, accusing the lender of being one of the city’s largest slumlords and seeking hundreds of millions of dollars in restitution.  “It’s time to recognize that the fraud committed on Wall Street turns into blight on Main Street,” City Attorney Carmen Trutanich said at a news conference announcing the lawsuit.

 “We must fight blight by holding banks accountable when they create vacant nuisance properties that pose threats to our residents and destroy the quality of life in our neighborhoods,” Trutanich said.

 The lawsuit accuses the bank of failing to maintain 166 properties and illegally evicting tenants from some of them. The suit lists the addresses of the properties and includes photos of the substandard conditions. You can read the lawsuit here and here.

(the lawsuit indicates that the majority of the properties were foreclosed in 2008 and 2009)

Deutsche Bank responded that the lawsuit was “against the wrong” party and that loan servicers, not Deutsche Bank, were responsible for maintaining foreclosed properties.

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