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, 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. Schneiderman estimated that New York has about 15,000 of them.
The bill would also require banks to provide written notice to homeowners who are three-months delinquent on their mortgages. The notice would aware of them of the fact that they could still occupy the property until they voluntarily surrender the title or 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.