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L.A. says Deutsche Bank among city’s largest slumlords, files suit seeking hundreds of millions of dollars [Updated]

Deutsche-bank01
The Los Angeles city attorney's office accused officials at Deutsche Bank, a German financial institution, of being among "the largest slumlords in Los Angeles" and filed an unusual lawsuit Wednesday asking a judge to fine the company hundreds of millions of dollars and issue an injunction forcing it to clean up the foreclosed properties it owns in Los Angeles, which have numbered 2,000 over the last four years.

Deutsche-bank03 After a yearlong investigation, city officials claimed in court papers that Deutsche Bank has illegally evicted tenants, shut off their water and power and then let hundreds of properties turn into graffiti-scarred dens for squatters, gang members and other criminals, destroying quality of life and driving up crime in the process.

[Updated at 10:34 a.m.: “The Los Angeles city attorney’s office has filed this lawsuit against the wrong party," Deutsche Bank spokesman John Gallagher said in a statement. "As we have repeatedly advised the Los Angeles city attorney’s office, loan servicers, and not Deutsche Bank as trustee, are contractually responsible for both the maintenance of foreclosed properties and any actions taken with respect to tenants of foreclosed properties.

"For over a year, we have offered to help the Los Angeles city attorney's office contact the loan servicers that are responsible for maintaining the properties in question," he continued, "but they have refused our help and would not even tell us which properties they were talking about.”]

City officials say the bank, which invested heavily in mortgage-backed securities, found itself "transformed ... from detached investment brokers ... to large-scale residential property owners, a role whose responsibilities ... they have completely eschewed."

If successful, city officials said, the suit would be the first of its kind in the U.S. in which a city was able to collect penalties and restitution from banks for the havoc that foreclosures have wrought.

Other cities have faced similar frustrations.

In 2008, the city of Cleveland sued Deutsche Bank and other financial institutions alleging that subprime mortgage lending practices had resulted in widespread foreclosures and blight. A judge dismissed the suit.

In Milwaukee, meanwhile, community groups, with the backing of Alderman Michael Murphy, traveled to Frankfurt, Germany, and spoke at a Deutsche Bank shareholder meeting, complaining of the "terrible condition" of Deutsche-owned properties in that city.

Los Angeles' legal action comes a day after the federal government filed a fraud lawsuit against Deutsche Bank accusing the firm of recklessly approving mortgages "in blatant disregard" of whether borrowers could make the required monthly payments. The government is seeking more than $1 billion in that suit.

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Photos, from top: City Attorney Carmen Trutanich, from left, and City Council members Dennis Zine, Eric Garcetti and Janice Hahn gather around a map marking 2,000 properties owned by Deutsche Bank after a news conference at City Hall; an eviction notice is attached to a broken window of one of Deutsche Bank's empty properties in the 800 block of West 83rd Street in South Los Angeles. Credit: Francine Orr / Los Angeles Times

 
Comments () | Archives (23)

Banks = Rip-offs'

This will never succeed.If Deutsche Bank feels that they are being unfairly discriminated against it will threaten to expose American banks of their own improprieties which are most likely legion.
This could potentially create another banking crisis so the American legal system, for what it is, will eventually back off and this whole issue will quietly disappear with no one or no banking institution ever held accountable for criminal activity.
Osama bin Ladin who committed horrendous crimes against this country paid for those crimes.Financial institutions that destroyed our economy as well as stole the jobs and homes of millions of Americans through recklessness,greed and ineptitude get off scot free with not one person held accountable for this horrendous crime.In fact they still get their million dollar or more bonuses for their crimes.
Think again if you really believe any type of legal action will bring justice to this financial form of terrorism whether in this country or abroad.Money talks and the legal system of any country can jump in the lake as far as financiers are concerned.They have the power and they have everything reason they need to use blackmail with impunity and carry on business as usual.

Cool. Should make for the city's budget deficit. Shyeah...right!

This suit will go nowhere. It is nothing but grandstanding by the city attorney.

I applaud the City of Los Angeles for taking this warranted action against Deutsche Bank. Not only are they largest "slumlords" in this City, but they have for years hid behind their Indymac Mortgage Services shield to deny, thwart and defraud their mortgagees who desperately needed help to be able to stay in their homes. As with other unscrupoulous companies like Deutsche Bank, this lawsuit is just the tip of the iceberg in the type of illegal and immoral activities that will hopefully be fully exposed. In addition to the City's lawsuit, the victims are interested in filing a class action against them.

Better the banks risk providing housing for slum dwellers than taxpayers. Public subsidized housing is a bottomless money pit.

I HOPE the Los Angeles city attorney's office is MORE forceful and STRONG than the regular courts that the "movie stars" go to! FORCE the bank to clean up their slums or confiscate their properties, knock down the buildings and clear the area and then put the land up for sale! These banks are WORTSE than the oil companies and are getting away with MURDER!

The naive Germans again. Deustche Bank, out of ignorance or greed, bought an American mortgage bank. I don't know anything about that bank but chances are DB was able to buy it, perhaps at a bargain price, because the Americans knew it was a sleeze outfit.
Now they are stuck with it and deserve it.

They should go after the US banks like Chase and BofA.

Sounds like another big bank, too big to fail, too big to follow the rules, but not too big to wriggle out of its duties as an owner. Thanks for nothing, Deutsche Bank.

Have the American banks done any better?

Fine. What about Bank of America, Citi, Wells and others that did the same thing? What about Goldman Sachs?

Yeah, I thought so. I love this country and hate what is happening to it. The government, oil companies and banks do what they need to do to protect their interests. Their interests are often not the same as what is best for taxpayers.

Cheap publicity for his district attorney campaign...

It's odd that the city attorney is doing this when they can't even keep their back yard clean.

I mean who do you think is trashing these places, spraying graffiti, stealing the appliance, windows, copper plumbing, wall heaters, etc. it goes on and on.

It's the neighbors, gang bangers, druggers, murderers and resident theives that are destroying the neighborhood.

The city attorney should do the residents of LA a favor and disband the LAHD.
and the corrupt inpsectors, housing authority clerks and cronies.

Change back to Mark to Market accounting now. Make the banksters account for these properties for the liabilities they are, instead of letting them sit with a materially false value on their books.

Is this a crack of possible justice to be served to the predators of the elitist frauds perpetrated upon the innocence of those who had faith in the ethics of our financial institutions? Will they actually be held accountable to the vast destruction they have imposed upon our society? Will they buy a politician or two and rectify their loophole escape mechanism as usual? Be sure to stand by for the next episode...>> To Be Continued<< Maybe???
Will Superman Renounce His American Citizenship?
Stay Tuned ...

The City of L.A. is 100% corrupt as well. And we already know both political parties are 100% corrupt including the Supreme Court (with the so called Citizen's United usurping the people of their power of one vote per human). We need a viable 3rd party and Nader - Kucinich would fit that bill well.

I was a victim of eviction frm Deutsch bank while I was in hospital due to an heart attack All my belongins were take away by the sheriff dept I want to know what is my right toward this matter my house was located at 4 Hunter Roslindale,MA 02131.
The court paper said I was abandon that house it was not true my wife and kids were kick out from the house.
Do I have a case towards Deutsch bank.
Federme Dauphin

This is just a big shakedown. DB has not been paying the lobbyists (politicians) at the level of the American Banks and therefore are being singled out. In 2008 big payments were made to the the right people in Cleveland and "the judge dismissed the suit." DB thought that was a one time expense. They don't know how America works. DB has to follow BofA and others and pay the Lobbyists. They run the protection and they control the government.

should be DOUCHE BANK

This is a publicity stunt by the City Attorney, Dennis Zine, Eric Garcetti and Janice Hahn, all of whom have political ambitions. Janice Hahn is the worst of the Hahn family: she thinks all renters are "victims" and all landlords, even families that own one or two apartment buildings, are bad guys. Hahn and the City Housing Authority have created imaginary rights for tenants, even the worst of them. It is almost impossible to evict a bad tenant, but it's very easy for a bad one to deliberately damage a landlord's property in order to put them into REAP so they can get away with paying less rent.
Dennis Zine is a pension whore: he hops from one City job to another, collecting pensions.
Deutsche Bank is not responsible for property maintenance; LEGALLY, the loan servicer is. Most of the so-called "victim" tenants stopped paying rent and probably the utilities once they figured out the property was in foreclosure. As far as I'm concerned, they should get 3 day notices to pay and if they don't, have the sheriff evict them. It's not their property and they have no right to squat. This happens a lot, as I've been to eviction court on behalf of the banks who are evicting deadbeat tenants. Grow up and stop whining.
The City Attorney should stop grandstanding and trying to get some free money from DB so the City Council and Mayor don't have to get off their lazy collective butts and do what they need to do: lay-off City employees and cut benefits.

Deutsche Bank and many other German banks are refusing to write down assets all over the U.S. This is the flip side of why Portugal, Greece and Ireland's debt hasn't been restructured. I applaud the DA's office for taking this action.

If you were evicted or victimized as a result of a foreclosure by Deutsche Bank or Mortgage IT, I would like to hear from you.

I am a journalist currently working on this story.

reinhardka (at) aol.com


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