LA gets tough on banks over foreclosure blight

By the Associated Press | May 22, 2011 | 11:14 AM EDT

LOS ANGELES (AP) — Communities across the nation have made little progress in getting banks to maintain foreclosed properties, and as the ongoing crisis matures and bank-owned homes fall into advanced stages of disrepair, cities and residents are getting desperate.

In a keenly watched move this month, Los Angeles forged a new strategy — it sued one of the world's major financial institutions, Deutsche Bank, to force it to take care of 166 properties, both vacant and renter-occupied, charging the blue-chip German giant has turned into the city's largest slumlord.

But Deutsche and other banks say they aren't really the owners, and are not responsible for maintenance.

Representatives of Deutsche, as well as other major lenders that Los Angeles is investigating for possible lawsuits, said that loan servicers are responsible for property upkeep.