Securities, Business and Commercial Lawyers

Cleveland Housing Renewal Project v. Wells Fargo

“Housing Court judge halts bank’s sales of foreclosed homes”

Plain Dealer - May 22, 2009
By Sandra Livingston

Cleveland Housing Court Judge Raymond Pianka on Thursday ordered Wells Fargo bank to temporarily stop selling any foreclosed homes it owns in the city.

A housing-advocacy group sought the temporary restraining order, saying that Wells Fargo has expanded its practice of dumping vacant and deteriorated homes for paltry sums without first doing repairs.  Wells Fargo and Cleveland Housing Renewal Project Inc., a subsidiary of neighborhood Progress Inc., are to be in Pianka’s court next week for a hearing to consider whether Wells Fargo properties should be declared public nuisances and be repaired or demolished before they can be sold.

The group estimates the order could cover as many as 183 properties. “I don’t know if there’s been a case of a bank anywhere in the county being held accountable like this for their entire inventory of vacant property,” said Frank Ford, the group’s executive director.

Wells Fargo, based in San Francisco, said the claims were unfounded. “We will defend our practices regarding the disposition of foreclosed properties,” company spokesman Kevin Waetke said via e-mail.

In December Pianka issued a similar order covering 11 Wells Fargo properties, and the two sides had agreed to extend it.  But the Housing Renewal Project recently requested the expanded order to cover all current and future company property.  The group said it had inspected 126 properties Wells Fargo owned as of April or had sold between December and April.  Housing Renewal Project claimed that 58 had problems, including that they were vandalized and vacant, had overgrown weeds, were littered with garbage and had obvious structural damage or other significant defects.

Pianka’s order, which could be in effect for up to 28 days, said the company could not sell the Cleveland property it owns now or in the future unless the property is in compliance with city codes.  The order applies to all properties whether Wells Fargo owns them or is the trustee for investors.

“All we are asking for in this case is that Wells Fargo be held responsible for the condition of the properties it owns,” the group’s lawyer, Thomas C. Wagner, said in an e-mail.

Waetke said that decisions are made case by case to determine the best course of action for handling a foreclosed home or vacant property and that Wells Fargo uses local real estate agents and preservation companies to ensure properties are secured and maintained, and to evaluate their condition.

In its filing, the company said certain properties were transferred more than four months before the inspection.

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