FRANKFURT: Deutsche Bank said it has settled a lawsuit with the US city of Los Angeles that accused the bank of allowing hundreds of foreclosed properties to deteriorate into slum conditions and destabilise communities.
“The settlement will be paid by the (loan) servicers responsible for the Los Angeles properties at issue and by the securitisation trusts that hold the properties,” the bank said in a statement late on Friday.
“Deutsche Bank is not contributing any funds toward the settlement,” it said, without disclosing any financial details.
“Deutsche Bank did not admit any liability or wrongdoing as part of the settlement, and continues to dispute the claims asserted by the City,” it added.
A statement from Los Angeles City said it has secured $10m in civil penalties as part of settlement of the lawsuit it filed in May 2011.
During the housing boom and subsequent bust, Deutsche Bank subsidiaries acquired more than 2,000 properties in Los Angeles, according to the city’s 2011 civil enforcement action.
The city accused Deutsche of becoming one of its largest “slumlords,” allowing vacant properties to turn into nuisances, neglecting to maintain occupied properties, and illegally evicting low-income tenants to clear the way for a sale.
Reuters
