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For sale signs are posted on a foreclosed house on September 15, 2011 in Glendale, California.
The L.A. City Attorney's Office filed a lawsuit against US Bank, alleging that the bank illegally allowed foreclosed homes to deteriorate into slums and "public nuisances". The Los Angeles Times says problems were found with US Bank's handling of 1,500 foreclosures, which included some 150 homes that have fallen into disrepair. The city is seeking an injunction, financial penalties and restitution from the company.
The city stated the bank failed to maintain foreclosed properties, and they've become havens for drugs and prostitution. The bank says it's just the "trustee" on loans, and that the companies that are the "loan servicers" should be keeping up the properties.
Stuart Gabriel, director of UCLA’s Ziman Center for Real Estate and professor of finance at UCLA Anderson School of Management