Sheppard Mullin Financial Institutions Law Blog

In another blow to residential lenders, the city of Los Angeles has passed an ordinance that will require the person that owns or is in control of certain residential real property to maintain the property in a safe and sanitary condition and in good repair. While one might logically expect that this ordinance would only apply to financial institutions once they have foreclosed upon the property or taken it back via a deed in lieu of foreclosure, the ordinance appears to go farther than that, requiring the financial institution to take responsibility for the condition of the property once a notice of default has been filed.

In a decision that was handed down on June 30, 2010, a United States District Court for the Northern District of Ohio has ruled that HUD's sham joint venture guidelines, as contained in HUD's RESPA Statement of Policy 1996-2 (the "Policy Statement"), are unconstitutionally vague, and has granted the defendants summary judgment against claims by the plaintiffs that certain affiliated title agencies violated RESPA. Carter v. Wells-Bowen Realty, Inc., 2010 WL 1607266.