Minneapolis-Area Community Sues Foreclosing Lender Over Vacant Home/Neighborhood Eyesore

The Minneapolis Star Tribune reports:

• A north Minneapolis neighborhood is taking on mortgage giant CitiMortgage in a test case attempting to make careless lending an act for which lenders can be held liable in Minnesota. The lawsuit filed Wednesday for the Hawthorne neighborhood reflects a growing national effort to hold lenders legally responsible for the damage caused by shaky loans that go to foreclosure.

***

• In Hawthorne, the lawsuit alleges that CitiMortgage used "negligent and improvident lending practices" to finance the purchase last March of a two-story white frame house on 31st Avenue. N. The neighborhood wants to buy the house from CitiMortgage for a redevelopment project but said it can't get a response. Meanwhile, the lawsuit alleges, the property has become a neighborhood eyesore that has attracted housing tags and 911 calls. It is seeking damages, a monitored alarm system and compliance with the city housing code.

Reportedly, CitiMortgage bought back the property at an October sheriff's auction, but since that time, the house has remained empty, and the police have responded to calls for burglaries and a fire at the premises. The housing tags were for unmowed grass and weeds and rubbish.

For more, see Neighbors sue lender over house left vacant (A north Minneapolis neighborhood aims to hold a lender accountable for alleged careless lending with action that could break new legal ground).