New York Gov. Andrew Cuomo has announced that the state, working through its Community Restoration Fund, has purchased 172 distressed mortgages in high-foreclosure areas, hoping to help keep the homeowners in their homes and avoid letting more abandoned properties fill the market. To date, the Fund has invested around $10 million and purchased 570 distressed mortgages, according to Newsday .
In a news statement, Cuomo said, “New York continues to fight the spread of Zombie properties by supporting homeowners seeking the American Dream and investing in at-risk neighborhoods. Through this transformative program, New Yorkers are provided the tools they need to make critical home improvements while helping communities grow stronger in every corner of the state."
Newsday reports that this latest round of purchases was funded through a mixture of more than $35 million in “privately funded debt and equity investments” and around $3 million from state settlements with lenders over foreclosure abuses. While state officials said that the primary goal was to keep the affected homeowners in their homes, the program could make some of its money back if those homeowners resume making mortgage payments.
Carol Yopp, Director of Counseling at the Long Island Housing Partnership, said that helping homeowners avoid foreclosure would “ stabilize the neighborhood and have a homeowner back on the tax rolls.”
While foreclosure rates have been trending downward nationwide, PropertyShark’s annual foreclosure report  recently found that New York City had 3,306 homes scheduled for auction in 2017, a year-over-year increase of 58 percent. However, the number of homes entering the foreclosure process with the receipt of a lis pendens notice—a formal notice of intent to foreclose, sent from the lender to the borrower after several months of delinquency—continued the downward trend of previous years. New York City recorded 12,072 new filings in 2017, which amounted to a four percent year-over-year decrease. That’s the lowest total in a decade, with the exception of 2011’s 10,911 filings throughout the city.
The state has also been moving to fight urban blight and abandoned “zombie homes” in a variety of ways. The state is considering  fast-tracking foreclosure laws as other states such as Ohio and Maryland have, and in June 2016 Gov. Cuomo set up a consumer hotline to take reports of zombie properties, of which there are an estimated 6,000 within the state of New York alone. According to a yearlong Newsday analysis, vacant properties cost Long Island at least $295 million in depreciated home values.
Recently, the LegalShield Foreclosure Index , one of five indices tracking multiple key economic indicators published monthly by LegalShield, dropped nearly 20 percent year-over-year, showcasing a continued national downward trend in foreclosure starts. According to the Foreclosure Index, “a recent surge in long-term interest rates has driven mortgage rates to their highest levels since 2014, which could lead to increased financial stress for homeowners with an adjustable-rate mortgage. For the time being, however, foreclosures are likely to remain muted, as the LegalShield Foreclosure Index—which is calibrated to provide an early warning signal to the market of an impending rise in foreclosure activity—points to minimal foreclosure activity in the next 2-3 months.”