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City of Cleveland Judge Pianka Preliminary Injunction REO Property Condition
Thursday, 18 June 2009

Following an issuance of a temporary restraining order last month, Cleveland Housing Judge Raymond Pianka issued a preliminary injunction that requires Wells Fargo to make the necessary fixes on any substandard property -- whether through repairs or demolition -- to comply with city codes. Additionally, where the company wants to sell property for less than $40,000, it has to first demonstrate to the judge that the property meets city code

Additional information is available in the following article from The Cleveland Plain Dealer.

Wells Fargo Bank ordered to bring foreclosed properties up to code in Cleveland

Cleveland Housing Judge Raymond Pianka has ordered Wells Fargo Bank to take responsibility for the conditions of the foreclosed property it owns in Cleveland -- a decision that could have broad implications in the city's struggle with vacant and dilapidated housing.

Pianka issued a preliminary injunction Thursday that requires the company to make the necessary fixes on any substandard property -- whether through repairs or demolition -- to comply with city codes.

And in cases where the company wants to sell property for less than $40,000, it has to first demonstrate to the judge that the property meets city code.

Wells Fargo had as many as 180 properties in the city as of April. It's not clear how many of those don't meet building and housing code standards.

"I don't believe a court anywhere in the country has issued an order that's this comprehensive against a major financial institution," said Frank Ford, executive director of the nonprofit housing advocacy group that had sued Wells Fargo over its property conditions.

 

"The ruling is specific to Wells Fargo, but it sets a precedent that says banks that have foreclosed on property, allow it to go vacant, and don't maintain it are going to be held to the same standards as any property owner in Cleveland," he said.

But before the ruling was issued, Wells Fargo said such an order would put restrictions on sales in a weak market, leaving the company's houses vacant even longer.

Pianka said in his ruling he wasn't persuaded by Wells Fargo's argument that an injunction would ultimately lead to more vacancies.

In a written statement issued late Thursday, Wells Fargo spokesman Kevin Waetke said the company believed there was no legal basis for the decision and will consider appealing.

"Wells Fargo has a long history of responsible lending and servicing in our communities," he said. "We stand by our lending record and practices as we feel it is always in the best interests of the community to have the home reoccupied in order to preserve the neighborhood."

Wells Fargo separately requested Thursday that Pianka remove himself from the case and suggested that his attendance at a recent conference on vacant properties, the primary issue in the case, created an appearance of bias. Pianka declined to recuse himself.

Last month Pianka issued a temporary restraining order prohibiting Wells Fargo from selling any foreclosed properties it owns in Cleveland that didn't comply with city code. That order expired Thursday.

In December, the Cleveland Housing Renewal Project, a subsidiary of Neighborhood Progress Inc., filed a lawsuit seeking to have company properties declared public nuisances that must be fixed or demolished.

The injunction could stay in place until Pianka rules on the request for a permanent order

To view the online article, please click here.

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 700 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.