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Miami Real Estate Watch: Bank-Owned Foreclosure Blight a Problem Nationwide

City attorneys in L.A. are taking U.S. Bank National Association to court for its failure to maintain thousands of foreclosure properties in the Southern California area. A harshly-worded lawsuit slams U.S. Bank as “the largest slumlords in the City of Los Angeles.”
Harsh, but not undeserved.

Our Miami foreclosure lawyers know that it’s not just U.S. Bank – and it’s not just in California.

Florida, too, has seen more than its fair share of blight caused by banks who are derelict in their ownership responsibilities once they foreclose upon homes, often improperly and sometimes illegally. Greed drives these institutions to allow these properties to fall into disrepair, putting their own pocketbooks ahead of the welfare of neighborhoods that have suffered because of the implosion of the housing market (caused, of course, by the banks and mortgage loan servicers).

The L.A. attorneys claim that the lack of upkeep on these foreclosed properties has corroded the quality of life for everyone in the neighborhood, and the city is seeking to hold the bank liable for hundreds of millions of dollars, as many of the homes fail to meet the basic standards of the city’s code.

Unsurprisingly, the bank is seeking to avoid responsibility by saying that they are not responsible because they don’t even own the properties nor are they responsible for maintenance. The homes are owned, they say, by trusts and those who invest in those trusts.

However, it appears that city attorneys have been engaged in ongoing talks with the bank regarding these properties for the last several years. Now, the bank is saying that it has made multiple requests from the city to submit a detailed list of properties in disrepair. The city, it says, only recently provided that information.

But let’s think about that for a moment: The bank is essentially placing a burden on the taxpayers (who fund the city attorney’s office) to inform it of which properties it owns and which are in disrepair. Given the fact that the bank is named as the owner on the deeds of these properties – it reaped the benefits of foreclosing upon them and it will benefit again when the homes are ultimately sold – it also holds the responsibility to maintain the property, just like any other homeowner in the country.

The city took similar action last year against Deutsche Bank, and that action is still pending, with Deutsche bank representatives also claiming they are the wrong party for the city to target.

These are just the efforts of one local government in one area, and the process has been slow-going. It shouldn’t take legal action – and taxpayer resources – to force these large financial institutions to maintain the same standards to which every other homeowner is held.

It’s laudable that the city in this case is going to bat for homeowners. Other similar actions include an Oakland program whereby banks must register foreclosed homes and have them regularly inspected and maintained, as well as a plan in two other Southern California cities to help underwater homeowners by seizing properties by eminent domain and helping them to restructure their mortgages.

There has been no talk of such action in Florida in the near future, which means if you’re fighting foreclosure, you need an aggressive attorney with a history of proven success.

If you’re battling foreclosure in Miami or the surrounding areas, contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991.

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