NY Attorney General Schneiderman Proposes Legislation to Address Foreclosures
On February 10, Poughkeepsie Journal published an article titled Schneiderman Would Push Banks to Address Foreclosed Properties.
Schneiderman would push banks to address foreclosed properties
ALBANY — Banks would be forced to more quickly address the upkeep of homes in foreclosure in New York under a measure proposed Monday by Attorney General Eric Schneiderman.
The proposal, which would need legislative approval, would also double the number of land banks in New York, which provide funding for the remediation of abandoned homes, from 10 to 20.
“The fact is if you have an abandoned property, it brings down the property values of the entire neighborhood; they are havens for crime,” Schneiderman told reporters. “They hurt the whole community, not just the family that lost their home.”
Upstate cities have struggled with abandoned homes. Buffalo has about 7,000 vacant homes, and Rochester has roughly 2,200. In Newburgh, Orange County, 10 percent of its housing stock is vacant, about 600 homes in a four-square-mile area.
“The big issue really is that nobody seems to have any responsibility for them,” said Newburgh Mayor Judy Kennedy. “So then what happens is you have the squatters, you have the people who come and strip them out of copper — and it just breeds crime.”
Schneiderman said he will introduce legislation that would target so-called zombie properties – homes that are abandoned by their owners during the foreclosure process.
The Democratic attorney general said that homeowners too often leave their property before lenders officially foreclose — and then the properties are left in disrepair.
His proposal would require lenders to become responsible for delinquent properties soon after they are abandoned – not at the end of the foreclosure process, which can be lengthy. He said it would force lenders to more quickly foreclose on homes.
The measure would also create a statewide registry of “zombie” properties, allowing local governments to better identify properties that have been abandoned. New York has about 11,000 owner-vacated properties, about 14 percent of the roughly 76,000 foreclosed homes, according to RealtyTrac, a website that tracks foreclosures.
The bill would also require banks to provide written notice to homeowners who are three-months delinquent on their mortgages. The notice would aware them of the fact that they could still occupy the property until they voluntarily surrender the title or are ordered by a court to leave.
Schneiderman said some homeowners are not aware that they don’t have to immediately vacate their homes when the foreclosure process begins.
“This is something we can do that will lead the country,” he said of the proposal.
RealtyTrac estimated that the Rochester area had about 1,100 “zombie” properties, or 27 percent, of the region’s 4,100 foreclosed homes. The Poughkeepsie area had about 800 owner-vacated properties, about 20 percent of the region’s foreclosed properties, which includes Newburgh and Middletown, Orange County.
About 32 percent of the Binghamton area’s properties in foreclosure were “zombie” properties, or about 350 homes.
Mayors were supportive of Schneiderman’s initiative. It was unclear whether the Legislature would support it; the session runs until late June.
The state Bankers Association said it would review Schneiderman’s proposal.
“The New York Bankers Association has long-supported efforts to address the issue of vacant and abandoned properties,” the group’s president, Michael Smith, said in a statement. “We support a bill currently pending in the Legislature which would accelerate the conclusion of the foreclosure process for vacant and abandoned properties, thus greatly reducing the period of time in which a property can fall into disrepair.”
Yonkers Mayor Mike Spano said that abandoned properties hurt the whole city.
“As a city, to have these things lie vacant, they just become either fire traps or continue to be eyesores,” Spano said. “We are looking for help in any way we can.”
Ithaca Mayor Svante Myrick said the city has a different problem: it doesn’t have enough housing. He said the law would help them more quickly redevelop about a half dozen vacant homes and buildings in the city.
“We’ve got a different kind of housing crisis in Ithaca. Our housing crisis is that we can’t get enough housing built,” Myrick said.
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Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders, and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally. Website: www.safeguardproperties.com.