New York Governor Announces 11 Institutions Will Adopt Best Practices to Fight Zombie Foreclosures

first_img As part of an ongoing effort to fight the problem of “zombie” foreclosures in New York, Governor Andrew Cuomo announced that 11 financial institutions that represent about 70 percent of the state’s mortgage market will adopt best practices to fight economic damage and blight zombie properties cause, according to an announcement on Cuomo’s website.Banks, mortgage companies, and credit unions are all included in the 11 institutions that are participating. The 11 institutions, are, alphabetically, Astoria Bank, Bank of America, Bethpage Federal Credit Union, Citi Mortgage,  Green Tree Servicing, M&T Bank, Nationstar, Ocwen, PHH, Ridgewood Savings Bank, and Wells Fargo.The best practices include regular inspections of foreclosed properties to determine if they are vacant and abandoned, and then maintaining those properties that are determined to be vacant and abandoned. The institutions will also report those properties that are determined to be vacant and abandoned into a registry developed by the New York State Department of Financial Services. The New York DFS will share the information with local government officials to address any concerns about maintenance on these properties with the bank or servicer that is handling 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,” Cuomo said. “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.”Zombie properties – those that are vacant and abandoned but are not yet owned by the mortgagee because the foreclosure process has not been completed – have been a problem throughout New York in the last few years, causing significant taxpayer expenses in the communities where these properties are located. Under current New York law, property maintenance is the responsibility of the property’s owner – thus when the property is abandoned, the property falls into disrepair and not only breeds more blight, but often becomes a magnet for vandalism and violent crime. Banks and servicers are not required to maintain the properties in New York until a court declares the foreclosure process is complete, which often takes three years or longer.”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,” said Benjamin M. Lawsky, Superintendent of Financial Services. “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.”Going forward, banks and mortgage companies will conduct an exterior inspection of a property within 60 days of delinquency to determine if the property is vacant and abandoned, and the inspections will continue every 30 days thereafter.  If a property is determined to be vacant and abandoned, the bank or mortgage company will change the lock, replace or board up windows, remove safety hazards, and make sure it complies with the New York maintenance code from that point forward. Click here to see the best practices the banks and mortgage companies will implement.Last month, New York Attorney General Eric Schneiderman introduced an expanded version of the previously-introduced Abandoned Property Neighborhood Relief Act, which will require a mortgagee 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 would also require the mortgagee 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.”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,” Schneiderman said. “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.” Servicers Navigate the Post-Pandemic World 2 days ago Share Save  Print This Post Sign up for DS News Daily New York Governor Announces 11 Institutions Will Adopt Best Practices to Fight Zombie Foreclosures May 18, 2015 1,457 Views Data Provider Black Knight to Acquire Top of Mind 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago Previous: Delinquency Rate Falls Below 3 Percent for First Time Since 2007 Next: VRM Mortgage Services Honored by DiversityBusiness For Second Straight Year Demand Propels Home Prices Upward 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Subscribe New York Vacant and Abandoned Properties Zombie Foreclosures 2015-05-18 Brian Honeacenter_img About Author: Brian Honea Tagged with: New York Vacant and Abandoned Properties Zombie Foreclosures 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. 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