Lenders Accused In Housing Court Of Dumping Blighted Foreclosures Onto Real Estate Market Shop For Friendlier Forum; Move Cases To Federal Court

In Cleveland, Ohio, The Washington Independent reports:

• The fight that neighborhoods in Cleveland are launching against banks that dump vacant and vandalized foreclosed homes back onto the real estate market received a bit of a setback, [...]. A private, non-profit housing advocacy group had filed suit in local housing court to force the banks to clean up their properties before selling them, or to demolish them entirely. But the banks - Deutsche Bank and Wells Fargo - convinced a judge to move the suit to federal court.

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• The move to federal court is more than just an arcane legal development. The neighborhood group wants the case heard in housing court because it validates what has become increasingly clear in the foreclosure crisis: Banks are property owners, with all the responsibilities that come with it. As they foreclose on houses and their inventories of bank-owned properties swell, banks try to dodge this reality by blaming servicers and paying lawyers to get them out of housing court.

• The same thing happened in Cincinnati recently, where the local legal aid agency filed suit in housing court, but the case was moved to a federal court instead.

For more, see Banks with Deep Pockets Dodge Foreclosure Damages.

See also, Lawsuit Targets Banks With Novel Tactic (Advocacy Group Takes Grievances to Housing Court):

• [C]leveland and other cities are “looking at old bodies of law to address new problems,” [University of Connecticut law professor] Patricia McCoy said, because they are trying to fight foreclosures with any tools they can. Cleveland has taken legal action previously over foreclosures. The city in January sued 21 investment banks, including Wells Fargo and Deutsche Bank, and accused them of creating and enabling the subprime crisis. The suit was filed in Cuyahoga County Common Pleas court. The latest suit differs in that it was filed in housing court. BetaVacantForeclosure