U.S. Bank to Pay L.A. $13.5-Million over Foreclosed Homes that Fell into Disrepair

Los Angeles Times | September 29, 2016        The Los Angeles city attorney has reached a $13.5-million settlement with U.S. Bank to resolve allegations that the nation’s fifth-largest bank operated as a slumlord and allowed hundreds of foreclosed properties to deteriorate, fostering crime and blight in L.A. neighborhoods slammed by the housing crisis.

The settlement, announced Thursday, requires the Minneapolis-based firm to maintain its foreclosed properties in “accordance with all applicable laws and standards for two years.” A full-time bank employee will work with city agencies to resolve code violations of foreclosed properties across Los Angeles, the city attorney’s office said.

“Banks must be accountable for the condition of the properties they hold,” City Atty Mike Feuer said in a statement. “This significant settlement underscores my commitment that all foreclosed and vacant properties be kept up to code, so they don't become sources of blight or magnets for crime.”   Read more here.

California Supreme Court Lets Borrowers Challenge Wrongful Foreclosures

National Mortgage News |  February 18, 2016     The California Supreme Court on Thursday ruled that borrowers may challenge a wrongful foreclosure on the grounds that the assignment of the deed of trust was invalid.

The decision in Yvanova v. New Century Mortgage Corp. has the potential to radically increase the number of lawsuits brought by borrowers, particularly on loans that were pooled into securitized trusts, experts on both sides of the issue said.

"There will be a flood of litigation only because the lending industry was not diligent in doing its paperwork during the housing finance boom," said Richard Antognini, who represented the plaintiff, California homeowner Tsvetana Yvanova.

The decision tackles a question that became important after the housing market's collapse in 2008: can a defaulted homeowner contest the validity of the chain of assignments involved in the securitization of loans?  Read more here.