A new law aimed at helping municipalities combat the blight associated with zombie properties passed the New York state legislature last week. The straightforward law requires mortgage servicers to “provide their name and contact information at multiple points during foreclosure proceedings” for one- to four-family homes in the state.
New York Assemblymember Monica Wallace and State Senator Tim Kennedy announced the passage of their joint legislation in a press release stating, “The purpose of this legislation is to help local governments easily identify who is responsible for maintaining the property.”
Their press release stated that many of New York’s so-called zombie properties are the result of the housing crisis of 2008.
“This legislation gives local governments an easy and efficient way to contact mortgage servicers to ensure that their maintenance obligations are enforced,” Wallace said. “By doing so, we are protecting neighborhoods from unsightly and potentially dangerous conditions created by zombie foreclosures.”
In the New York metro 8.9% of properties in foreclosure are zombie properties, meaning the owner has left the property while the home remains in the foreclosure process, according to the latest zombie foreclosure data from ATTOM Data solutions.
In these cases, New York deems it falls to the servicer to maintain the property to ensure safety and compliance with neighborhood codes.
Sometimes, cities and municipalities have a hard time tracking down the appropriate servicer to take care of an abandoned property in need of maintenance or repair. Properties can then become sources of blight, causing neighboring property values to decline.
“By requiring these institutions to provide their names and contact information prominently during foreclosure proceedings, municipalities will be able to more effectively ensure these problem properties are documented, tracked, and remediated as quickly as possible so that our neighborhoods can be restored to their original character and charm,” Kennedy said.