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New Jersey S2545/A3793: Concerns Expedited Process for Foreclosing Vacant and Abandoned Residential Properties in Uncontested Actions

Posted on September 13, 2018 by Safeguard

On June 8, NJ S2545/A3793 had a second reading and is under consideration in the State House. If enacted, the bill would amend P.L.2012, c.70 (Senate Bill 2156).

New Jersey Senate Bill 2545, originally introduced October 27, 2014, and subsequently substituted by Senate Committee on June 8, 2015, proposes an expedited process for foreclosing vacant and abandoned residential properties in uncontested actions.

It amends P.L.2012, c.70 (Senate Bill 2156). P.L.2012, c.70 authorizes lenders to bring summary actions to foreclose mortgages on vacant and abandoned residential properties, and grants state courts the authority to enter a final residential mortgage foreclosure judgment if it finds, by clear and convincing evidence, that the residential property is “vacant and abandoned,” proper summary judgment procedures are followed, and no answer, written objection, or appearance asserting a defense or proper cause would preclude a judgment. See “Summary NJ SB 2156” for further explanation of P.L.2012, c.70 (Senate Bill 2156).

New Jersey Senate Bill 2545 modifies New Jersey law (P.L.2012, c.70) as follows:

It adds another condition that may be used to help indicate that the mortgaged real estate is “vacant and abandoned”: certification from the board of a planned real estate development in which the residential property is located, as defined under section 1 of P.L.1990, c.55 (C.2A:42-103), stating with specificity that the property has been observed to be abandoned.
It requires that the residential mortgage lender’s action to foreclose be uncontested. As defined pursuant to R.4:64-1(c) of the Rules Governing the Courts of the State of New Jersey, an action is uncontested if, as to all defendants:

a default has been entered as the result of failure to plead or otherwise defend; or
none of the pleadings responsive to the complaint either contest the validity or priority of the mortgage or lien being foreclosed or create an issue with respect to plaintiff’s right to foreclose it; or
all the contesting pleadings have been stricken or otherwise rendered noncontesting.

It requires that the mortgagor, or any other defendant, include an affidavit when filing an answer, written objection, or appearance asserting a defense or proper cause to preclude a judgment stating that the defense is not made solely for the purpose of delaying the relief requested pursuant to the summary action. Also, the defense or objection must be presented within 30 days of the filing of the service of the application to proceed summarily.
It requires that the lender pay a $1,000 fee for the expedited process.
It adds two entirely new sections:

The first section allows the board of the planned real estate development to take action when a lender is entitled to pursue a summary action but fails to do so and the mortgage lien of the lender is superior to the lien of a planned real estate development. The board may file a motion to compel expedited judgment and sale, or in the alternative, payment of association fees outstanding, along with ongoing fees, until occupied by a new resident. If filed and served correctly, then the Superior Court shall (1) compel the lender to either file within 30 days or pay association expenses; or (2) approve an application for an Order Appointing a Fiscal Agent.
The second section allows the board to apply to the Superior Court of New Jersey for an Order Appointing a Fiscal Agent over an abandoned or unoccupied unit. The fiscal agent shall be authorized to: (1) manage the unit; (2) license the use of the unit; (3) keep the unit insured against loss, damage by fire, or public liability; (4) repair and otherwise do anything necessary for the care and management of the unit; (5) demand, collect and receive from any licensee of the unit or any portion of the unit, or any person liable for the unit, any payment due from any licensee of the unit; (6) institute all legal proceedings necessary for the protection of the unit, or to recover possession of the unit or any part of the unit, and to institute actions for the collection of payments due, and to institute summary proceedings for the removal of any licensee; and (7) retain legal counsel to render legal advice and to provide legal services as may be necessary in the performance of its duties. Neither the title owner of a unit, nor its agent, employee, heir or devisee shall be entitled to receive or collect any payment due pursuant to any license agreement issued by the fiscal agent.

Please click here to view the full text of NJ S2545/A3793 online.

Please click here to view a summary of NJ SB 2156 [pdf].

About Safeguard
Safeguard Properties is the mortgage field services industry leader, preserving vacant and foreclosed properties across the U.S., Puerto Rico, Virgin Islands and Guam. Founded in 1990 by Robert Klein and headquartered in Cleveland, Ohio, Safeguard provides the highest quality service to our clients by leveraging innovative technologies and proactively developing industry best practices and quality control procedures. Consistent with Safeguard’s values and mission, we are an active supporter of hundreds of charitable efforts across the country. Annually, Safeguard gives back to communities in partnership with our employees, vendors and clients. We also are dedicated to working with community leaders and officials to eliminate blight and stabilize neighborhoods. Safeguard is dedicated to preserving today and protecting tomorrow. Website: www.safeguardproperties.com.

Nevada Senate Passes Bill to Amend ?Super-Priority Lien? Law

Posted on September 13, 2018 by Safeguard

On June 2, DS News published an article discussing the passing of Nevada Senate Bill 306.

Nevada Senate Passes Bill to Amend ‘Super-Priority Lien’ Law

The Nevada State Senate passed a bill at the last minute just before the end its legislative session that revises the provisions of a law that allows homeowner’s associations (HOAs) to foreclose non-judicially on a residential home when the homeowner’s HOA dues become delinquent, according to the Nevada State Legislature.

Nevada Senate Bill 306, a bi-partisan bill sponsored by Nevada State Senators Aaron Ford (Democrat) and Scott Hammond (Republican) in March, was approved late last week just before the legislative session ended on Sunday. The bill was created in response to the controversy created by a ruling handed down by the Nevada State Supreme Court last September that gave HOAs authority to attach “super-priority lien” status to a mortgage, this allowing them to extinguish a mortgage on a home where the owner is delinquent on HOA dues without going through the courts.

HOAs claim the super-priority lien status is necessary because it forces banks to pay the delinquent HOA dues and not leave responsible HOA members footing the bill to keep the HOA’s infrastructure intact, according a report from the Reno Gazette-Journal. Banks and lenders that have suffered huge losses in some cases when HOAs have extinguished mortgages where the delinquent HOA dues amounted to a fraction of the balance on the mortgage claim that the super-priority lien law gives the HOAs too much power.

Furthermore, the Federal Housing Finance Agency (FHFA) issued a warning in December to HOAs that attach super-priority lien status to mortgages, saying that such loans will not push mortgages backed by Fannie Mae and Freddie Mac into the secondary position because of the risk they pose to taxpayers while the GSEs are under the FHFA’s conservatorship. FHFA general counsel Alfred Pollard testified before the Nevada State Legislature Judiciary Committee in early April, backing SB 306.

“By way of summary, FHFA does find that most of the provisions of SB 306 improve the situation for lenders and secondary market participants in Nevada and support common interest communities, while we continue to have concerns with other sections of the existing law and practices under that law,” Pollard said in his testimony.

The bill requires an HOA to provide the mortgagee with a formal statement of the amount of the deficiency along with a breakdown of all charges that will allow the mortgagee to address the lien payment if the unit owner does not, thus giving mortgagees the chance to protect their position. Other provisions of the bill include requiring the foreclosure notice to be published in a “public place” such as a newspaper or a county website, and provide that if a payment is made to the HOA for the amount of the dues deficiency no later than five days before the foreclosure sale, then the HOA cannot legally extinguish the first lien. In his testimony in April, Pollard called this a “prudent approach.”

Currently, 22 states allow HOAs to attach super-priority lien status to mortgages.

Please click here to view the article online.

Please click here to view the full text of SB 306.

Please click here to view an in-depth analysis of SB 306 from Wright, Finlay, & Zak (courtesy of the MBA).

More than 1.5 Million ?Boomerang Buyers? Could Re-Enter Mortgage Market In Next Three Years

Posted on September 13, 2018 by Safeguard

On June 17, DS News released an article discussing a new study released by TransUnion which focuses on homeowners impacted by the recent mortgage crisis.

More than 1.5 Million ‘Boomerang Buyers’ Could Re-Enter Mortgage Market In Next Three Years

More than 1.5 million “boomerang buyers” – those negatively affected by the housing crisis – could re-enter the housing market at some point in the next three years, according to a study released by TransUnion on Wednesday.

Boomerang buyers include those who are 60 or more days delinquent on a mortgage loan, have had a mortgage loan modified, or have lost a home through foreclosure, short sale, or deed-in-lieu of foreclosure. TransUnion estimates that about 700,000 boomerang buyers could re-enter the mortgage market in 2015, and another 2.2 million could re-enter the market over the next five years.

“Based on our study findings, the burst had a significant and dramatic impact on many consumers’ ability to re-enter the mortgage market after suffering through the downturn,” said Joe Mellman, vice president and head of TransUnion’s mortgage group. “It’s been over seven years since the beginning of the mortgage crisis; this is significant because many derogatory items, such as foreclosures and short sales can prevent consumers from qualifying for a new mortgage for a period of time. The timing of that challenge can vary: for example, four years must pass after a short sale and seven years must pass after a foreclosure. As consumers responsibly manage their credit and pass these milestones, we anticipate a tide of newly mortgage-eligible consumers entering the market.”

In order to determine consumers’ ability to re-enter the mortgage market, TransUnion’s study analyzed the credit-active population in the United States during a three-year period from the end of 2006, which was the end of the housing bubble, until the end of 2009, which was the end of the housing bust and in 2014.

The study found that only about 18 percent, or 1.3 million, out of the 7 million impacted consumers had recovered enough by December 2014 to meet agency credit underwriting guidelines. The study also determined, however, that 2.2 million of the remaining 5.7 million consumers could potentially meet those underwriting guidelines over the next five years.

TransUnion found that about 42 percent of those 1.3 million consumers who have recovered currently have a mortgage, while 58 percent of consumers who have recovered do not.”As boomerang buyers who experienced foreclosures or other negative impacts become eligible to re-enter the mortgage market, they may not immediately do so if they are not aware they are eligible again, or feel daunted by their prior experience,” Mellman said. “Lenders can help consumers ease this transition with credit education programs addressing consumer eligibility, and help them better understand their borrowing options.”

The study also examined the impact of the mortgage crisis on consumer credit scores and found that about 39 million consumers dropped at least one credit score tier during that three-year period between the end of the bubble and the end of the bust. By the end of 2014, less than half of those (16 million) had recovered enough to be in the same risk tier they were in prior to the housing bust.

Certain credit risk score tiers have shown marked improvement in scores, however, according to Trans Union. About 7 million consumers moved into the prime or better risk categories between 2009 and 2014 (meaning they have a Vantage Score 3.0 credit score of 661 or higher ) while an additional 8 million moved from the subprime risk tier (credit score of 660 or lower with VantageScore 3.0) into a higher risk tier during that period.

“An important question lenders face is when to re-engage with consumers who have been challenged managing credit in the past. Despite the negative impact of the mortgage crisis on many consumers, we’re seeing promising recovery as consumers shift to lower risk tiers,” said Ezra Becker, VP of research and consulting in TransUnion’s financial services business unit. “The pronounced decline in the number of subprime consumers indicates that time has diminished the impact of Burst-era derogatory items on consumer credit. While some lenders may be hesitant to offer loans to these impacted consumers, our data show these consumers are becoming better credit risks. Our study puts a framework around the re-engagement question relative to the mortgage crisis, and that’s good news for both lenders and consumers alike.”

Click here to see the entire study from TransUnion.

Please click here to see the article online.

Milwaukee May Expedite Tax Foreclosures to Crack Down on Delinquent Landowners

Posted on September 13, 2018 by Safeguard

On May 31, the Milwaukee – Wisconsin Journal Sentinel published an article discussing a proposed measure that would accelerate the city of Milwaulee’s ability to foreclose on vacant, tax-delinquent properties.

Milwaukee may expedite tax foreclosures to crack down on delinquent landowners

The Milwaukee Common Council is expected to take up a measure Tuesday that, if approved, would accelerate the city’s ability to foreclose on vacant, tax-delinquent properties.

The idea behind the measure, which was authored by Ald. Bob Bauman and supported by City Treasurer Spencer Coggs, is to thwart scofflaws who manipulate property tax practices and to place abandoned homes in city hands before they blight and destabilize neighborhoods.

The Judiciary and Legislation Committee approved the measure Friday after a failed attempt to hold the matter for further consideration.

The city’s housing policy director, Aaron Szopinski, said he agreed with the intent of the measure but wanted to better understand its potential fiscal impact.

“There is nothing to be gained by holding this,” Bauman said. “We’ve been twiddling our fingers about this for five years.”

Under the current system, the city treasurer’s office employs a three-phase process of tax enforcement:

During the first phase, the city attempts to collect the taxes the year they are due. Five collection letters — four from the treasurer and one from the city attorney — are sent out.
If taxes remain uncollected, the account is turned over to the city’s collection law firm, which has 12 months to resolve the matter.
As a last resort, the city forecloses on the property and becomes its owner.

Bauman said those who manipulate the process know they have about three years before the city takes the property. Some landowners will wait until the last possible moment to pay their taxes. Others will wait for the city to foreclose and then just walk away.

“If a property is vacant and eligible for tax foreclosure,” Coggs said, “under this proposal it will not be referred to the city’s collection law firm.

“Instead, my office will pursue a … tax foreclosure to save the property from spiraling downward,” he said.

Bauman said he thought the measure would light a fire under those who use tax delinquency as a business model.

Coggs said the city already collects 98 cents of every tax dollar levied. The measure is more about neighborhood stabilization, he said.

“This new initiative is designed to keep communities more cohesive by not allowing one vacant home to bring down the property values of the entire neighborhood,” he said.

Please click here to view the article online.

Keep America Beautiful Releases National Report Addressing Community Impacts of Blighted Properties

Posted on September 13, 2018October 29, 2018 by Safeguard

On May 27, Keep America Beautiful issued a press release announcing the release of a new report titled Charting the Multiple Meanings of Blight: A National Literature Review on Addressing the Community Impacts of Blighted Properties.

Keep America Beautiful Releases National Report Addressing Community Impacts of Blighted Properties
National Literature Review, “Charting the Multiple Meanings of Blight,” is First Phase of New Long-term Initiative to Study, Measure and Combat Blight in Communities

STAMFORD, Conn., May 27, 2015 /PRNewswire-USNewswire/ — Keep America Beautiful, the leading national nonprofit that envisions a country where every community is a clean, green and beautiful place to live, today announced the release of “Charting the Multiple Meanings of Blight: A National Literature Review on Addressing the Community Impacts of Blighted Properties.” The report provides a contemporary snapshot of how researchers, experts and practitioners describe and understand the complex conditions that create blight and the many policy responses that communities are taking. The executive summary and full report of “Charting the Multiple Meanings of Blight” is available on the Keep America Beautiful website.

Prepared by researchers through the Vacant Properties Research Network (VPRN), a project of the Metropolitan Institute at Virginia Tech, in collaboration with Econsult Solutions Inc., a Philadelphia-based consulting firm, the national report examines more than 300 academic articles as well as special policy and practitioner reports devoted to the concept of blight.

“The term ‘blight’ continues to evolve as communities confront different types of blighted properties from littered and vacant lots to foreclosed and abandoned homes,” said Jennifer Jehn, president and CEO, Keep America Beautiful. “This research will contribute significantly to the understanding of blight, a critical environmental, economic and social issue Keep America Beautiful and our affiliates are strongly positioned to help address in urban, suburban and rural communities nationwide.

“The report will have an even broader impact because it will help us shape the development of measurement tools that will let us better assess and then prepare strategies to combat blight in all its forms at the community level,” concluded Jehn.

The primary authors outlined: 1) what recent articles and reports say about blight; 2) how policymakers and community-based organizations can leverage the report’s findings; and 3) how Keep America Beautiful and its network of community-based affiliates can build on this report to develop a blight cost calculator for community groups and local governments. The report concludes with 10 overarching recommendations for policymakers, future research, and potential actions by Keep America Beautiful and its affiliates.

“Blight is a complex legal and policy concept with a long history,” observed Metropolitan Institute Senior Fellow Joe Schilling, a report co-author. “This pioneering synthesis of the literature will help local officials and community-based organizations, such as Keep America Beautiful and its affiliates, fashion more holistic strategies to address the community impacts of blighted properties and facilitate neighborhood revitalization.”

Report co-author Lee Huang of Econsult Solutions Inc. agrees. “What we found in our work is that ‘blight’ looks like and means different things in different settings. Our review of the existing literature really underscores this point, and has yielded a very rich look at how various communities define and deal with blight.”

While considerable research has examined the history of blight in the United States, its role in national policy and the experience of communities living in blighted neighborhoods, little research has systematically examined the multiple meanings of blight across contexts. This project reviews and synthesizes knowledge about blight, broadly conceived, and draws together academic literature and practitioner reports to systematically assess:

The nature of blight;
The effects of blight;
The factors that have shaped its development; and
How understandings of blight have changed over time.

This literature review will benefit policymakers, particularly in understanding how different communities are addressing rising rates of vacancy and how property abandonment has come to be a common characteristic of contemporary blight. The research also provides new and beneficial knowledge for local communities by making the changing patterns of neighborhoods more transparent. Further, for underrepresented and disadvantaged groups and their advocates struggling with blighted neighborhoods, this research will underscore many of the factors affecting their condition.

About Keep America Beautiful
Keep America Beautiful is the nation’s leading nonprofit that brings people together to build and sustain vibrant communities. With a national network of community-based affiliates, we work with millions of volunteers who take action in their communities to transform public spaces into beautiful places. Through our programs and public-private partnerships, we engage individuals to take greater responsibility for improving their community’s environment. For more information, visit kab.org, follow us on Twitter, like us on Facebook, or view us on YouTube.

About Econsult Solutions Inc.
Econsult Solutions Inc. provides insights into economic problems, policy questions, and strategic thinking. Our work focuses on providing customized economic expert services in Real Estate, Transportation, Economic Development, and Public Policy and Finance. In addition, we provide Litigation Support services in over 40 industries, as well as customized Solutions to a variety of clients. Our staff members have outstanding professional and academic credentials, including active positions at the university level, wide experience at the highest levels of the public policy process and extensive consulting experience.

About the Vacant Property Research Network
The Vacant Property Research Network (VPRN), a research initiative of the Metropolitan Institute of Virginia Tech, conducts, translates and promotes applied policy research to facilitate new models for reclaiming vacant and abandoned properties as well as the alignment of regeneration policy initiatives and programs. Launched in October 2011 with support from the Ford Foundation, the VPRN provides a dynamic platform for problem solving, policy exchanges across cities, and applied research. The VPRN tracks innovative research and policy initiatives; hosts an online public research inventory; convenes practitioner-researcher roundtables; publishes translation briefs and case studies; and is led by its VPRN Advisory Board, which provides strategic guidance to the network, serves as a repository of research expertise, and is comprised of leading and emerging scholars together with practitioners from the vacant property and legacy cities field. For more information, visit vacantpropertyresearch.com.

CONTACTS
Mike Rosen / Larry Kaufman
Tel: 203.659.3008/203.659.3014
Email: mrosen@kab.org /lkaufman@kab.org
Web site: www.kab.org

Logo – http://photos.prnewswire.com/prnh/20121114/DC12613LOGO

SOURCE Keep America Beautiful, Inc.

Please click here to view the press release online.

Please click here to view the Executive Summary.

Please click here to view the full report.

Governor Cuomo Announces Major Mortgage Companies Agree to Measures to Combat Vacant Abandoned ?Zombie Properties”

Posted on September 13, 2018 by Safeguard

On May 18, New York Governor Andrew Cuomo issued a press release announcing the adoption of a set of best practices by 11 financial institutions to address vacant and abandoned properties.

Governor Cuomo Announces Major Mortgage Companies Agree to Measures to Combat Vacant Abandoned “Zombie Properties”

Industry Best Practices Will Help NYDFS Work with Local Officials to Curb Blight, Reduce Taxpayer Costs, and Shore up Property Values

Wells Fargo, Bank of America, Citigroup, and Other Companies Representing Nearly 70 Percent of the NY Market to Adopt Zombie Property Best Practices

Governor Andrew M. Cuomo announced today that 11 banks, mortgage companies, and credit unions representing nearly 70 percent of the New York market will adopt a set of best practices to help combat the neighborhood blight and economic damage caused by vacant and abandoned “zombie properties” in New York State. Under these best practices, the banks and mortgage companies will regularly inspect properties that fall into delinquency to determine if they are vacant and abandoned, and make sure that those properties are safe and properly maintained, among other measures. The banks and mortgage companies will also report properties determined to be vacant and abandoned to a state registry to be developed by the New York State Department of Financial Services, which will share that information with local government officials. The Department will work with those local officials to address and escalate any concerns about maintenance with the bank or mortgage company that is servicing the loan.

“Zombie properties can bring down the economic health and safety of entire neighborhoods – but by working together we are taking steps to help strengthen and repair local communities,” said Governor Cuomo. “We commend these companies for working with us to address this problem. This action is a win-win that will benefit communities and mortgage owners across the state, and should serve as a model for protecting neighborhoods from the dangers of vacant and abandoned properties in the future.”

Benjamin M. Lawsky, Superintendent of Financial Services, said: “The wave of zombie properties that arose in the wake of the financial crisis harms local communities and threatens the long-term health of the mortgage market. These common sense actions are an immediate and vital part of repairing that damage as we continue to pursue additional legislative reforms. We will work closely with local officials, mortgage companies, and other stakeholders to continue addressing the vital problem of zombie properties.”

“Today’s agreements are a welcome step forward in our fight to stop the epidemic of vacant ‘zombie homes,’ which have burdened our communities with maintenance costs, lowered property values, and crime,” said Attorney General Eric T. Schneiderman. “I will continue to work with my colleagues in government across the State to pass our Abandoned Property Neighborhood Relief Act, a legislative solution that will codify today’s reforms into law, provide meaningful enforcement, and give municipalities the resources to take back their streets. I applaud Superintendent Lawsky for moving the ball forward on this crucial issue.”

Darryl C. Towns, Commissioner/CEO of New York State Homes & Community Renewal, said: “Homeowners have to be good neighbors and banks have to be good neighbors. This effort to support neighborhoods and strengthen communities is another way to preserve regional integrity and serves as an abatement to blight. Ensuring the safety and well-being of New Yorkers and helping maintain foreclosed homes is a priority for the state. Working together, we can restore stability and security to neighborhoods.”

Vacant and abandoned properties are a significant problem throughout New York State, causing blight and safety hazards, and creating significant taxpayer expenses for local communities. This issue is exacerbated by a protracted foreclosure process and the damage caused by the financial crisis. Under existing law, property owners are responsible for the maintenance of their properties and, thus, banks and mortgage companies are not required to maintain vacant and abandoned properties until they receive a judgment of foreclosure, often three years or more after filing for foreclosure. During this limbo period, some properties may fall into disrepair, and worsen blight and safety issues.

NYDFS convened a group of the nation’s largest banks and mortgage companies – both those it regulates and those it does not – to help address this problem. Among the protections provided by the best practices announced today, banks and mortgage companies will conduct an exterior inspection of a property within 60 days of delinquency to determine vacancy and abandonment, and then every 30 days thereafter. If the property is determined to be vacant and abandoned, the bank or mortgage company will secure each unit at the property by changing the lock, replacing or boarding up windows, posting the property with contact information, and eliminating other safety hazards. Then, on an ongoing basis, the bank or mortgage company will monitor the property’s condition to ensure it remains secure and that it complies with applicable provisions of the New York maintenance code (e.g. the grass must be cut, and conditions at the property must be safe and sanitary). The best practices are applicable to first-lien mortgages on residential homes and subject to existing laws, and insurer and investor guidelines.

Kirsten Keefe, Senior Attorney at the Empire Justice Center, said: “Vacant and abandoned buildings are plaguing our cities and towns in the wake of the foreclosure crisis. We commend the Governor for recognizing this problem and devoting resources to resolving the issue. This is a good first step by the banks to take responsibility for these properties so that cities are not left holding the bag.”

After these best practices are adopted and the registry has been created by NYDFS, participating banks and mortgage companies will notify NYDFS of any new properties they have determined to be vacant and abandoned and NYDFS will share this information with local officials across the state. NYDFS will accept complaints from neighbors or local officials about the properties. The Mortgage Assistance Unit of DFS, which works regularly with banks and mortgage companies to address mortgage-related issues affecting New Yorkers, will work with the applicable bank or mortgage company to resolve issues raised in any such complaint. Complaints can be submitted to NYDFS at http://www.dfs.ny.gov/consumer/fileacomplaint.htm.

The banks, credit unions, and mortgage companies that are adopting these best practices, which represent nearly 70 percent of the New York market, are:

Wells Fargo
Bank of America
Citi Mortgage
Ocwen
Nationstar
PHH
Green Tree Servicing
Astoria Bank
Bethpage Federal Credit Union
M&T Bank
Ridgewood Savings Bank

NYDFS will continue discussions in the days and weeks ahead with additional banks and mortgage companies encouraging them to adopt these industry best practices. The best practices are targeted to be implemented and adopted by August 2015.

To a view a copy of the best practices the banks and mortgage companies will implement, please click here.

Contact the Governor’s Press Office

NYC Press Office: 212.681.4640

Albany Press Office: 518.474.8418

Contact us by email:

Press.office@exec.ny.gov

Please click here to view the press release online.

Please click the following link for additional media coverage:

DS News (5/18/15)

Glens Falls, NY Set to Begin Eminent Domain Proceedings

Posted on September 13, 2018 by Safeguard

On May 27, the Glens Falls Post-Star published an article titled City to use eminent domain to pressure banks to clean up foreclosure properties.

City to use eminent domain to pressure banks to clean up foreclosure properties

GLENS FALLS The city of Glens Falls will initiate eminent domain proceedings on abandoned, run-down homes in the mortgage foreclosure process as a tactic to get banks to fix broken windows, mow lawns or work with city officials to sell the properties.

“If we threaten that we’re going to take them (houses) and turn them to over to the (city) Urban Renewal (Agency), maybe they’ll (banks) send someone out to fix a broken window,” said 3rd Ward Councilwoman Jane Reid, a lawyer.

Reid said the goal is to get the attention of bank officials who have been unresponsive, and establish contact so city officials can speak with them about properties in derelict condition and about programs city community and economic development agencies can use to assist the banks with selling foreclosure properties.

“If we can get direct communication … that would speed up the process,” said Mayor John “Jack” Diamond, at a Common Council workshop on Tuesday.

“The banks we are dealing with here are not local banks, obviously,” Reid said.

Reid said there is little expectation the city would succeed with lengthy eminent domain proceedings.

City officials hope banks would be willing to negotiate out-of-court settlements, Diamond said in a follow up interview Wednesday at City Hall.

The Fifth Amendment of the U.S. Constitution allows governments to take private property if the land is transferred for public use. Government must pay fair market value for the land that is taken.

Blight is one of the reasons that can be used to take property.

Eminent domain is one of two tactics Common Council members informally agreed to pursue at the workshop meeting on solutions to so-called “zombie properties,” which are homes that are deteriorating and unkempt during the foreclosure process.

The city also will compile GIS maps, lists of code violations and documentation of foreclosure status to submit in August for a new state program that addresses zombie properties.

“So we have two tracks,” said 5th Ward Councilman James Clark, who initiated the workshop meeting.

Under the new state “Best Practice Agreement” program, 11 banks and mortgage companies have agreed to secure vacant houses, replace or board up windows, eliminate safety hazards and post bank contact information on the property.

The bank will then monitor the property and maintain it to comply with state maintenance code.

Municipalities can begin submitting properties to the new state database in August.

Reid said state maintenance code is not as stringent as city building code.

The state code, for example, only requires grass to be mowed when it grows higher than 10 inches, she said.

One reason city officials have had trouble getting the attention of banks is that the city has relatively few foreclosure properties, in comparison with other cities, said Councilman at-Large Dan Hall.

Common Council members have identified 26 foreclosure properties in the city, as of Jan. 14.

There is at least one property in every ward in the city.

“We’re all impacted by it,” Clark said.

Diamond said Wednesday he will release the list as soon as his staff verifies the addresses and foreclosure status of properties and whether properties have code violations.

Under state law, property owners are responsible for the maintenance of their properties. Banks and mortgage companies are not required to maintain vacant and abandoned properties until they receive a judgment of foreclosure, which can take three years or longer, said EDC Warren County President Edward Bartholomew.

Please click here to view the article online.

Connecticut Foreclosure Mediation Program Extended Through 2019

Posted on September 13, 2018September 13, 2018 by Safeguard

On May 27, The Hartford Courant published an article titled House Overwhelmingly Approves Extension Of Foreclosure Mediation.

House Overwhelmingly Approves Extension Of Foreclosure Mediation

HARTFORD — The House of Representatives voted overwhelmingly Wednesday to extend the state’s foreclosure mediation through 2019, a compromise bill accepted by banking lobbyists.

The vote was 140-2 in favor of the bill, which still needs a vote in the Senate.

Continuing the program costs about $6.7 million a year to pay for salaries and benefits for 51 state employees.

However, since the number of new cases entering mediation has been falling sharply, it’s possible some of those employees could be transferred to other jobs or let go, if union contracts allow it. The bill says, “The size of such program shall be determined by available funding and the number and need of participants in such program.”

The program employs 25 mediation specialists, nine case-flow coordinators and 16 office clerks.

The mediation program, which lenders must participate in if a borrower asks, began in 2008 and was set to expire at the end of June next year.

“Although the number of homes in foreclosure has thankfully decreased since 2008, there are many Connecticut families who still depend on these services,. said Rep. Matthew Lesser, D-Middletown. “I am thankful for the overwhelming support this bill has received, and hope for a vote in the Senate soon.”

Cases would not have to be resolved before July 1, 2019, the proposed end of the program. Instead, requests for mediation must be filed by that date, and those pending cases would continue until a settlement was reached.

Only 63 percent of those who were in the mediation program over the 18 months ending in December completed the process during that time, but of those who did, 72 percent got to keep their homes.

On average in Connecticut, homes that are foreclosed on without going through mediation take a year and 63 days to complete the process. Homes that are covered by the mediation program take two years and 104 days to complete a foreclosure.

About 45 percent of eligible homeowners do not sign up for mediation, though the instructions on how to do so are given with foreclosure summons.

Please click here to view the article online.

Benjamin Lawsky Declares New York’s Foreclosure System ‘Broken’

Posted on September 13, 2018September 13, 2018 by Safeguard

On May 20, the New York Law Journal published an article titled State Banking Regulator Calls for Foreclosure Changes.

State Banking Regulator Calls for Foreclosure Changes

Despite years of judicial, legislative and industry attention, the home mortgage foreclosure process in New York remains “broken and badly in need of change,” state Financial Services Superintendent Benjamin Lawsky declared Tuesday morning.

Lawsky proposed a series of changes he said would improve the process for both homeowners who want to hold onto their dwellings and for lenders who want to rescue their properties from financial loss and, in some cases, abandonment.

Lawsky told a conference sponsored by the Mortgage Bankers Association in Manhattan that a study released Tuesday by the Department of Financial Services found that mandated settlement conferences—enacted in 2009 as a way of protecting consumers’ interests—were the biggest cause of delay in the foreclosure process.

He said there were 115,000 such conferences held last year, and that it takes an average of nine months from the time the foreclosure filing is made to when the settlement conference process is complete.

“For borrowers that are already at the end of their rope, any interruption—let alone nine months of start-and-stop delays— can be the death knell to any chance of saving their home,” Lawsky said.

The Department of Financial Services study said that while current law, CPLR 3408(a)(f), requires that both parties “negotiate in good faith,” a precise definition of “good faith” is probably the biggest cause of the costly delays in the settlement process.

Courts, confronted with lenders whose representatives are not authorized to reach settlements at these conferences or consumers who don’t have the right paperwork with them, often simply adjourn the conferences, Lawsky said. That further delays the process and makes it that much harder for consumers to hold onto their homes as interest and late charges on overdue mortgage payments continue to mount, he said.

“This is not a flaw in the court system; it is a flaw in the law,” Lawsky said. “The unintended consequences of this legal flaw are unproductive conference sessions, useless delays, waste of court resources, and, most importantly, needless foreclosures.”

Lawsky proposed legislation that would better define what negotiating in good faith means, in practical terms, for those sitting at the court-supervised settlement conference table.

He also said courts should be allowed to sanction parties who fail to bargain in good faith.

For lenders, Lawsky proposed, the sanction should be a tolling of interest, costs and fees when delays are being caused by plaintiffs. Borrowers who are responsible for failing to negotiate in good faith should have their right to the conference terminated, he said.

The question of what constitutes “good faith” in mortgage foreclosure negotiations has been increasingly under consideration by courts.

In November, an Appellate Division, Second Department, panel ruled in a case where a lender was found to have intentionally dragged out the settlement process that the borrower was not entitled to accruing interest or to legal fees (NYLJ, Nov. 5, 2014).

Lawsky also proposed that courts should conduct a “surge” of activity where they devote special judicial and court resources to clearing the backlog of foreclosures currently on court dockets.

“The Office of Court Administration and several courts around the state already know the effectiveness of a judicial fast track, because they have trialed such programs in Suffolk, Nassau and the Bronx,” he said. “Now it’s time to take the best of these trial programs and employ them statewide.”

Lawsky said special attention should be paid to expediting foreclosure processing on so-called “zombie homes” which have been abandoned by mortgage-holders. He said that the homes are doing their communities no good sitting vacant and “rotting” for years as foreclosures wind their way through the legal system.

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HousingWire (5/19/15)

United States: Changes to Landlord’s Right to Dispose of a Tenant’s Personal Property Post-Eviction

Posted on September 13, 2018September 13, 2018 by Safeguard

On May 13, Maya S. Zahne Rhine, attorney in the Real Estate Practice area for Reinhart Boerner Van Deuren S.C. authored an article discussing a modification to Wisconsin’s landlord/tenant laws.

United States: Changes To Landlord’s Right To Dispose Of A Tenant’s Personal Property Post-Eviction

Numerous modifications to Wisconsin’s landlord/tenant laws were enacted in 2013 and, for the most part, became effective as of March 1, 2015. One major change affects a landlord’s obligation to store an evicted tenant’s personal property.

Pursuant to the prior law,1 which still applies to evictions filed before March 1, 2015, a landlord must arrange with a sheriff to move and store any personal property of the to-be-evicted tenant. In most counties, this requires a landlord to set up the eviction with a bonded mover, although some counties allow landlords to purchase their own bond of insurance. After eviction, a landlord cannot throw away any of the evicted tenant’s property; only a sheriff has the authority to determine whether something is trash to be thrown away. The sheriff must give the evicted tenant notice of the location of the stored property and the cost to retrieve such property. Before disposal of any stored property, 30 days’ notice to the evicted tenant is required.

Now, as modified2 (which applies to evictions filed on or after March 1, 2015), absent a written agreement between a landlord and a tenant to the contrary, a landlord may presume that any personal property left by an evicted tenant is deemed abandoned, and a landlord may dispose of the abandoned personal property as it considers appropriate. There are limited exceptions to this rule for prescription medication and medical equipment,3 or if the property is a mobile home or vehicle.4 Beyond notifying a sheriff that the landlord is removing abandoned property themselves, no sheriff involvement is required.

Importantly, the new law applies only if the landlord provides written notice in the tenant’s rental agreement that the landlord will not store any personal property left behind by the tenant. If no such notice is provided in the rental agreement, the landlord must follow the old statutory requirements.

Key takeaways for landlords:

Check your rental agreements to be sure they include a provision that the landlord will not store any tenant’s personal property.
Remember that you must follow the old statutory eviction requirements for evictions filed before March 1, 2015.
For evictions filed after March 1, 2015, there is no requirement for a landlord to store personal property of evicted tenants so long as (a) the rental agreement includes the required notice provision and (b) the personal property does not qualify for an exception (i.e., the property is not medical equipment, prescriptions, a mobile home or a vehicle).

Footnotes

1 Wis. Stat. § 799.45(2) & (3) (2013-14).

2 Wis. Stat. § 704.05(5) (2013-14).

3 Landlord must hold prescription medication and medical equipment for seven days from the date on which the landlord discovers the property before disposing of the medication and/or equipment. Wis. Stat. § 704.05(5)(am) (2013-14).

4 Notice is required prior to disposal of a manufactured or mobile home, or a vehicle. Wis. Stat. § 704.05(5)(b) (2013-14).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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