Showing posts with label Los Angeles. Show all posts

Thursday, August 2, 2012

Los Angeles Sues U.S. Bank, Calls It a 'Slumlord'

By Jonathan Stempel

The city of Los Angeles has sued U.S. Bank, accusing a unit of the fifth-largest U.S. commercial bank of becoming one of its biggest slumlords and blighting the city by allowing hundreds of foreclosed homes to fall into disrepair.

Monday's civil lawsuit by the office of Los Angeles City Attorney Carmen Trutanich alleges that U.S. Bank has taken title to more than 1,500 foreclosed residential properties in the city in its role as trustee for various mortgage-backed securities trusts.

Los Angeles said that at least since July 2008, U.S. Bank has "disregarded virtually every one of its legal duties and responsibilities as owner, resulting in the creation and maintenance of an alarming number of vacant nuisance properties and substandard occupied housing units."

It said the bank has ignored repeated demands that it comply with the law, causing hundreds of homes to become uninhabitable or "public nuisances," and resulting in illegal evictions of hundreds of tenants from the second most-populous U.S. city.

Los Angeles said that it is seeking a civil fine of $2,500 a day for each violation by what it called "one of the largest slumlords in the city." It estimated the bank's potential liability to be in the "hundreds of millions of dollars."

Thomas Joyce, a spokesman for Minneapolis-based U.S. Bank, said it is the mortgage servicers, not the trustee, who have the responsibility to maintain foreclosed properties, and that "we intend to bring them into" the lawsuit.

Joyce also said the city only recently agreed to detail which homes needed better upkeep, and that the bank will "stand ready" to address property-specific and general foreclosure concerns as it has done in other cities.

Other Cities' Lawsuits

Other large U.S. cities have also sued over mortgage industry practices that they allege contributed to urban blight.

Wells Fargo & Co, the nation's largest mortgage lender, in May settled a lawsuit by Memphis, Tenn., and on July 12 it settled a similar case involving Baltimore.

The Baltimore accord was reached in connection with the San Francisco-based bank's $175 million settlement with the federal government over allegations that it overcharged black and Hispanic borrowers on mortgages, contributing to higher foreclosures.

Wells Fargo was one of five big servicers to join February's $25 billion U.S. settlement over foreclosure abuses.

The National Fair Housing Alliance filed discrimination complaints with the federal government in April against both U.S. Bank and Wells Fargo, accusing them of doing a better job maintaining foreclosed homes in white neighborhoods than in minority neighborhoods.

According to the 2010 census, Los Angeles had 1.41 million housing units, of which about 95,000 were vacant. The city's population was about 3.79 million.

Shares of U.S. Bancorp were down 9 cents at $32.69 in morning trading on the New York Stock Exchange.

The case is People v. U.S. Bank NA et al, Superior Court of California, Los Angeles County, No. BC488436.

Copyright 2012 Thomson Reuters. Click for restrictions.

Friday, October 28, 2011

WHAT ABOUT HOMEOWNER HOSKING? WAKE UP AG KAMALA HARRIS AND DOBERMAN MITCHELL J. STEIN AND HELP VIRGINIA HOSKING WHO IS SCARED OUT OF HER MIND, WAITING TO BE FORCED FROM HER HOME. FOCUS!

Lawyer accused of mortgage-related fraud sues attorney general

October 28, 2011 | Will Evans

Jeff Turner/Flickr

Los Angeles-area attorney Mitchell J. Stein refers to himself as "The Doberman" and his website advertises, "You Hold The Leash."

In August, California Attorney General Kamala Harris raided Stein's offices and accused him and other lawyers of fraudulently misleading thousands of struggling homeowners into paying to be part of mass lawsuits against mortgage lenders like Bank of America.

But Stein sued back, after warning on his Twitteraccount that "The Doberman is about to take a large bite out of Kamala Harris." Stein has accused the attorney general of being "the pawn of America’s most powerful banks,” claiming that Bank of America "corruptly funneled money" to Harris, according to one of his lawsuits.

As the legal sparring continues, the alleged fraud victims are running out of time.

Virginia Hosking received a notice last week directing her to vacate her foreclosed Whittier house within three days.

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"Now I’m sitting here freaking out, afraid to walk out my front door in case they come lock me out," Hosking said.

Hosking said her husband had just passed away and she was facing foreclosure last year when she paid $4,000 to another law firm targeted in Harris' fraud suit.

Hosking said she was told that joining the lawsuit against her mortgage lender, Bank of America, would help save her house. At some point, Stein's firm, which has been suing Bank of America since 2009, took charge of Hosking's case.

The attorney general accused the lawyers of deceiving homeowners into thinking that the lawsuits would stop foreclosures or reduce their mortgage payments. In a press conference announcing the action, Harris called it "work that will bring justice to many homeowners in California who were targeted by predators who happened to have a law license."

Stein, who signs e-mails with a picture of a Doberman pinscher, claims that he is "Bank of America’s biggest nightmare" and that Harris' suit puts struggling homeowners at risk.

He points out that Harris received four donations in February, totaling $1,500, from attorneys with the law firm representing Bank of America.

Stein's recent lawsuit accuses Harris of doing the bidding of Bank of America by removing "the superstar who had been beating the bank to a pulp for two and a half years."

Shum Preston, a spokesman for Harris, called the suit frivolous.

"We respectfully decline to address the very strange claims made in this lawsuit," he said in a statement. "It is, sadly, another example of what we uncovered during our investigations: false promises designed to lure already distressed homeowners into paying money to lawyers who refuse to properly represent them."

A Bank of America spokeswoman declined to comment.

Stein's office sent e-mails to clients like Hosking asking them to show up at a court hearing to support Stein "in the fight against bank and government corruption."

His firm sent out a press release that said hundreds of homeowners would gather in solidarity with the Occupy Wall Street movement and "against Ms. Harris' support of the 1%."

Meanwhile, the State Bar of California obtained a court order stating that Stein "has become incapable of devoting the time and attention to ... his law practice" and authorizing the bar to seize his files and freeze his bank accounts.

Stein, however, maintains the order doesn't apply because it names Mitchell J. Stein and Associates and not his newer partnership, Mitchell J. Stein & Associates LLP. For the same reason, Stein's website states, "this law Firm has never been sued by the State of California."

Stein is also trying to stop seizure of his assets through his Florida bankruptcy proceeding.

The state bar notified Hosking that she could pick up the confiscated files relating to her, but she would have to find another lawyer.

Hosking keeps getting solicitations promising to save her house if she pays a fee.

"There are all kinds of preying people out there. I don’t know who to trust anymore," she said.

The state bar will work to return money to alleged victims from Stein's frozen funds, said Suzan Anderson, an attorney for the bar. Authorities also are encouraging banks to give a break to people like Hosking.

"Right now, the attorney general and the state bar are discussing with the lenders how they might be able to put a hold on any foreclosures because of these actions and maybe work with the people and give them time," Anderson said.

Monday, April 18, 2011

DAMN IT!!! A $335 MILLION PENALTY IS DEMANDED HERE, THIS ISN'T A PENALTY, IT IS A SLAP ON THE WRIST, HELL, IT'S A KISS ON THE FRICKEN CHEEK.

LA court hits Wells Fargo
with $3.5 million penalty
in discrimination case

by JON PRIOR
Thursday, March 24th, 2011, 12:53 pm

A Los Angeles Superior Court jury ruled against Wells Fargo (WFC: 29.49 -1.34%) Thursday in a mortgage discrimination case, awarding borrowers $3.5 million.

The class-action lawsuit alleged the bank knowingly discriminated against borrowers in minority neighborhoods. As a result, borrowers were charged more for their loans than those in predominately white areas of Los Angeles County, the court ruled.

The 880 borrowers participating in the class-action case will receive $4,000 each in damages. Plaintiffs originally asked for $24 million total for an original 7,000 plaintiffs. Those participating the class received first-lien mortgages of more than $150,000 between May 2002 and December 2005.

Plaintiffs alleged that in 2002, Wells introduced a computer program called "Loan Economics" that they said gave loan officers the ability to offer applicants lower pricing on a loan. However, branch managers in minority neighborhoods disallowed the use of the program.

Wells Fargo said in a statement Thursday that the program was an internal tool only that helped staff determine commission accounting, not loan pricing.

"We are disappointed with the jury’s decision, and we do not believe that it is in line with the law and the facts of this case. We are evaluating our post-trial options. And, as we have said from the beginning, Wells Fargo is committed to serving all customers responsibly and fairly," Wells said. "Pricing decisions were left to the discretion of loan officers, who were always free to offer borrowers lower prices."

A. Barry Cappello, a partner at Cappello & Noël and the attorney for the plaintiffs, said the jury found that race, color and national origin was a "motivating reason" for how Wells treated these customers.

"The culture at Wells Fargo Bank only pays lip service to fair lending," Cappello said. "No systems are in place to prevent managers from engaging in the most insidious form of discrimination against customers who are least equipped to deal with it."

Write to Jon Prior.