Monday, December 29, 2008

Lawsuit Targets Banks With Novel Tactic

Advocacy Group Takes Grievances to Housing Court

By Mary Kane 12/29/08 3:11 AM

Some Cleveland neighborhoods have a message for banks that abandon their foreclosed houses or unload them at fire sale prices to speculators: Stop dumping your trash on us.

Using a novel legal technique that could be copied elsewhere, the Cleveland Housing Renewal Project Inc., a private, non-profit housing advocacy group, is asking Cleveland housing court to declare the business practices of Deutsche Bank and Wells Fargo in violation of local public nuisance laws. The suit seeks to force the banks to either fix up their foreclosed houses before selling them or to demolish them entirely - instead of dumping them back on the market at Basement Bob-style real estate prices.

A housing court judge on Dec. 15 granted a restraining order preventing the two banks from selling 36 foreclosed houses for at least two weeks. A ruling on whether to make the order permanent was scheduled for Monday, but the banks over the weekend had the case moved to federal court in Cleveland, Wells Fargo said in a statement.

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