Home / Daily Dose / New York AG Officially Introduces Expanded Bill to Fight ‘Zombie’ Foreclosures
Print This Post Print This Post

New York AG Officially Introduces Expanded Bill to Fight ‘Zombie’ Foreclosures

foreclosure-twoNew York Attorney General Eric Schneiderman has introduced an expanded version of the Abandoned Property Neighborhood Relief Act which he introduced last year in order to cut down on the number of "zombie properties" – vacant homes not maintained during the long foreclosure process – in the state.

The modified bill is intended to expedite the foreclosure process on vacant properties and direct money collected for noncompliance of the law into a fund used to enforce the law, according to Schneiderman's announcement.

"New York will never be able to fully recover from the devastation of the financial crisis until we seriously reckon with the crisis of zombies," Schneiderman said. "The Abandoned Property Neighborhood Relief Act, which enjoys the support of local elected officials, law enforcement, and fair housing advocates all across New York, will equip our local communities with the resources they need to halt the spread of abandoned and vacant homes. Albany can finally alleviate the burden that these blighted properties impose on our towns and cities by passing the Abandoned Property Neighborhood Relief Act during this legislative session."

The expanded bill requires mortgagees to provide homeowners with early notice that they are legally entitled to remain in their homes until the foreclosure process is complete (until a court orders them to leave), since many homeowners are unaware that they do not have to leave the house immediately when the foreclosure process begins. The bill also makes it illegal for a mortgagee to enter an occupied property and intimidate, harass, coerce, or otherwise induce the occupant to leave, which would render the property vacant.

The bill requires mortgagees to take responsibility for maintenance of vacant properties soon after they are vacated, and not at the end of the foreclosure process, as called for by the current law. Mortgagees would be required to identify, secure, and maintain vacant and abandoned properties in addition to paying for the upkeep of those properties. Also, the new bill would require mortgages and loan servicing agencies to periodically inspect properties with delinquent mortgages to determine if they are still occupied.

Also as part of the bill, mortgagees and their agents are required to electronically register zombie properties in a newly-created statewide database, the Vacant and Abandoned Property Registry, that will be established and maintained by Schneiderman's office. Community residents can use a toll-free hotline to report suspected vacant properties, which can identify the mortgagee responsible for maintaining them. Responsible parties that fail to register abandoned properties will be subject to a civil penalty, according to Schneiderman's announcement.

Among the new provisions of the bill are a call to expedite the currently lengthy foreclosure process in New York and to direct penalties received for noncompliance with the law into a fund which local municipalities can use for enforcement of the law in the municipality where the violation occurred.

"The foreclosure crisis left neighborhoods scarred by vacant and abandoned properties. The introduction of the Abandoned Property Neighborhood Relief Act brings New York State a step closer to curing the blight these properties bring to neighborhoods by holding banks accountable for their upkeep," said New York State Senator Jeff Klein, Senate Coalition Co-Chair and sponsor of the new bill, S.4781. "We expect banks to maintain properties and we will keep a list of empty homes. We want to support towns and counties who have been dealing with the blight of zombie properties for too long. With the support of Attorney General Eric Schneiderman, my colleagues in the Senate and the Assembly, I hope we can pass this crucial package of legislation for New Yorkers."

Click here to see a video of Schneiderman discussing the new bill.

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.
x

Check Also

Wells Fargo Names New Chief Revenue Officer

Wells Fargo announced today that Derek Flowers has been appointed the company’s Chief Risk Officer, effective immediately. Flowers ...

Your Daily Dose of DS News

Get the news you need, when you need it. Subscribe to the Daily Dose of DS News to receive each day’s most important default servicing news and market information, absolutely free of charge.