AG Schneiderman Launches Statewide Effort to Combat Zombie Properties

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Schneiderman: Zombie Properties Threaten Neighborhoods Across New York State

New York, NY - May 19, 2014 - Attorney General Eric T. Schneiderman today launched a statewide effort to encourage the State legislature to pass the Abandoned Property Neighborhood Relief Act he proposed earlier this year.  As part of the effort, New York City Councilmember Ritchie Torres announced that he will introduce a council resolution encouraging the legislature to pass the bill.  Attorney General Schneiderman also announced that the city councils of Albany, Poughkeepsie, Elmira, Beacon, Jamestown and Hornell are scheduled to pass resolutions on Monday urging passage of the bill. The city councils of Newburgh, Binghamton and Schenectady passed similar resolutions already.
 
Introduced in the Senate by Co-Leader Jeff Klein and in the Assembly byAssemblymember Helene Weinstein, 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.
 
“Zombie properties threaten neighborhoods across New York State, from big cities to small towns,” said Attorney General Schneiderman. “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 ripple effect of abandoned properties due to foreclosure are clear – property values plummet and neighborhoods become hotbeds for criminal activity,” said Senate Co-Leader Jeffrey D. 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.”
 
“In too many neighborhoods all across New York State, lending institutions have permitted vacant and abandoned residential properties that are delinquent in payments to fall into disrepair,” said Assemblymember Helene E. Weinstein, Assembly Judiciary Committee Chair. “Such properties are a blight on neighborhoods and bring down the property values in communities. I commend New York State Attorney General Eric Schneiderman for proposing this bill that I am proud to sponsor. It is a balanced measure that will help protect our neighborhoods by identifying and ensuring maintenance of properties early on.”
 
“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.”
 
“As we begin to address New York City’s housing crisis, it is important to make sure abandoned residential properties are taken care of,” said Council Member Jumaane D. Williams (D-Brooklyn), Deputy Leader and chair of the Council’s Housing and Buildings Committee. “Too often buildings will fall in disrepair once a homeowner has moved out because of a foreclosure notice, making it more susceptible to crime and vandalism. During that foreclosure process, lending institutions need to be held responsible for the upkeep of these buildings, not only to ensure the safety the neighborhood, but to guarantee our city and state's housing inventory does not fall short because of neglect."
 
"Abandoned properties are blighting influences on the health and safety of our neighborhoods. They also are a costly burden on the municipalities who step in to seal and secure them to protect the public safety," said Vicki Been, Commissioner of the Department of Housing Preservation and Development. "This bill will hold lenders accountable for maintaining derelict properties and allow our city to allocate resources to other critical code enforcement activities. I thank the Attorney General for his partnership and commitment to protecting our communities."
 
The Attorney General’s Abandoned Property Neighborhood Relief Act will hold 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. 
 
Richard Conti, President Pro Tempore of the Albany Common Council, said, "Albany uses a lot of valuable resources trying to track down owners of derelict buildings. The Attorney General's legislation gives cities additional tools to fight urban blight and revitalize neighborhoods.  That's why the Albany Common Council unanimously adopted a resolution supporting its enactment into law."  
 
Elmira City Councilmember Dan Royle said, "There are several of these properties in my district that have been. festering problems for years. Resolving code concerns and other problems related to vacant properties has been very challenging. Just this past year I have had to contact bank officials as far away as India to deal with property management concerns and code issues. I sincerely appreciate the attorney generals effort on our behalf and all cities in New York that are struggling with this issue." 
 
Schenectady Mayor Gary McCarthy said, “Vacant and abandoned properties drain needed taxpayer resources and are detrimental to the quality of life in our neighborhoods.  Attorney General Schneiderman’s proposal is a much needed step toward combating this significant issue in a comprehensive way.” 
 
Christopher D. Petsas, Majority Leader of the City of Poughkeepsie Common Council, said, “I commend Attorney General Schneiderman for showing leadership and the political will to push for a much needed solution to a problem that increasingly harms neighborhoods like those in Poughkeepsie. Vacant properties are a blight on neighborhoods and significantly diminish the quality of life for residents of any community. The Attorney General’s legislative proposal will both protect the rights of homeowners and require the banks that conduct business in our neighborhoods to act as good neighbors.”
 
Jamestown Mayor Sam Teresi said, “The proposed zombie property legislation crafted by Attorney General Schneiderman and his office has my full support as the Mayor of Jamestown.  The registry that will be created for vacant and abandoned homes will give our code enforcement and public safety officers an important tool for our continued neighborhood revitalization efforts.  I encourage the New York State Senate and Assembly to pass this legislation, and the Governor to sign it to help protect our neighborhoods which are the heart and soul of our communities. We cannot have robust economic development if our neighborhoods are in trouble with vacant and abandoned properties that have to endure a long and protracted foreclosure process leaving the city taxpayers to take care of these properties.”
 
“Today, the Attorney General has brought attention to an issue that those of us who work in foreclosure prevention are, unfortunately, all too familiar with,” said Christie Peale, Executive Director of the Center for NYC Neighborhoods. “Following the financial crisis, vacant and abandoned properties have been a blight on neighborhoods across the state. We commend the Attorney General for championing this legislation and we look forward to continuing to work together to make our communities safer and stronger.”
 
Meghan Faux, Acting Project Direction of South Brooklyn Legal Services, said, “Vacant and abandoned properties have a destabilizing effect on communities exacerbating the housing crisis and depressing economic recovery. Thanks to Attorney General Schneiderman's legislation we will be able track vacant and abandoned properties, and implement mechanisms to ensure these properties are maintained preventing neighborhood blight, stabilizing home values and preserving affordable housing.
 
Homeowners who are in need of assistance are encouraged to call the Attorney General’s statewide foreclosure hotline at 855-HOME-456 and visit www.AGHomeHelp.com to connect with organizations and agencies in their area that can provide foreclosure prevention services.
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