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Foreclosed Homes Falling into Disrepair--One City Sues

As foreclosures continue to remain high, you have to wonder what is happening to the foreclosed homes after the foreclosure sale? Roughly 620,000 foreclosed homes in the United States are owned by lenders, according to Realty Trac. Approximately a fourth of those homes have been waiting for a new buyer for two years or more and around a tenth for three years or more. The longer these foreclosed homes remain vacant and waiting on buyers the greater risk the homes will fall into disrepair and hurt the property values of the surrounding neighborhoods. The City of Los Angeles has had enough. This summer LA sued U.S. Bank, the country's fifth-largest commercial bank, for failing to maintain more than 170 foreclosed properties. Last year LA filed a similar suit against Deutsche Bank. LA states that the bank owned foreclosed homes are neglected and communities are suffering as a result. Both banks have attempted to defend themselves by arguing that LA has sued the wrong parties in the lawsuits. In a foreclosure proceeding, there may be up to three different banks involved--the owner of the mortgage note, the servicer, and the trustee. U.S. Bank and Deutsche Bank both claim to be trustees and that the servicers of the notes are responsible for maintaining the properties. However, LA city attorneys counter that the trustee is responsible for ensuring the servicers maintain the foreclosed properties and set in when the foreclosed properties are not being maintained. Unfortunately this problem is not limited to LA. The National Fair Housing Alliance, a Washington-based nonprofit organization, filed complaints with the Department of Housing and Urban Development against U.S. Bank and Wells Fargo for failure to maintain foreclosed properties in Atlanta, Miami, Oakland, California, Washington, D.C., and other cities across the United States. The organization inspected 218 foreclosed properties owned by Wells Fargo and 177 foreclosed properties owned by U.S. Banks and found on average half have serious deficiencies with the average rising significantly in minorities communities. Are you facing foreclosure? You have options! Call 254-633-2876 today or email us at [email protected] for a FREE, no-obligation consultation with experienced staff. Let my family help yours.   Photo Credit: Jay Santiago

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