Senator Klein, Councilman Torres, And NY AG Schneiderman All Combating “Zombie Property” Problem

Attorney General Eric T. Schneiderman launched a statewide effort on Monday to encourage the State legislature to pass the Abandoned Property Neighborhood Relief Act he proposed earlier this year.  As part of the effort, Councilman Ritchie Torres announced that he will introduce a council resolution encouraging the legislature to pass the bill.  

Ritchie Torres“Abandoned and distressed homes are an eyesore for the community, and have real safety and financial implications for neighboring residents,” said Bronx Council Member Ritchie Torres. “I commend Attorney General Schneiderman and Senator Klein for advancing legislation that places responsibility for these properties where it belongs- with the banks and lenders that put them into foreclosure.”

Introduced in the Senate by Jeff Klein, the Attorney General’s Abandoned Property Neighborhood Relief Act would provide critical support to communities that have been plagued with vacant properties. Among other measures, the bill would make lenders responsible for delinquent properties soon after they are abandoned – not at the end of a lengthy foreclosure process – and pay for their upkeep.

Jeffrey D. Klein“The ripple effect of abandoned properties due to foreclosure are clear – property values plummet and neighborhoods become hotbeds for criminal activity,” said  Senator Klein. “One foreclosure can threaten the safety, well-being and quality of life for an entire community. In 2009, I was happy to work with Assemblywoman Weinstein and then State Senator Schneiderman to pass legislation requiring the maintenance of properties upon foreclosure. Attorney General Schneiderman’s legislation is the next common sense step in holding banks responsible at the outset andcurtail a neighborhood crisis before it’s begun. This bill will ensure we not only keep our communities safe, but our neighborhoods beautiful and strong.”

 “Zombie properties threaten neighborhoods across New York State, from big cities to small towns,” said the Attorney General. “Abandoned homes become magnets for crime, drag down property values and drain municipal coffers. Our bill will keep communities safer and lessen the burden of municipalities still struggling to recover from the housing crisis.”

The Attorney General’s Abandoned Property Neighborhood Relief Act will hold “land banks” accountable for so-called zombie properties. Too often, when a homeowner falls behind on mortgage payments and receives a notice of arrears or a foreclosure notice, the homeowner abandons the property. Many families are not aware that they have the right to remain in their home until a judge declares the foreclosure complete, which can take years. At the same time, there is evidence that lenders are actually slowing down the foreclosure process, and in some cases, seeking court orders to cancel foreclosure actions in the middle of the process.

With no one maintaining these derelict properties, they become vulnerable to crime, decay, vandalism and arson. Furthermore, these zombie homes decrease the property value of neighboring homes and become an enormous burden for local code enforcement and emergency service providers.

An epidemic of zombie homes has impacted communities statewide. RealtyTrac estimates more than 15,000 properties to be zombie foreclosures.

The Abandoned Property Neighborhood Relief Act seeks to close the current loophole, changing state law to make lenders responsible for delinquent properties soon after they are abandoned – not at the end of a lengthy foreclosure process – and to pay for their upkeep. Banks or their servicers would be required to notify delinquent homeowners of their right to stay in their homes until the foreclosure process has been completed.

The bill would also create a statewide registry for zombie properties that would be electronically accessible by, and serve as a resource for, localities facing abandoned property issues. Banks that fail to register an abandoned property will be subject to civil penalties and/or court actions.

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