Nassau County, NY - May 7, 2015 - Attorney General Eric T. Schneiderman announced today the introduction of a newly-expanded Abandoned Property Neighborhood Relief Act, legislation aimed at stemming the rising tide of abandoned foreclosed homes (“zombie homes”) across New York. The bill (A.6932/S.4781) requires that banks and mortgage servicers maintain vacant and abandoned residential properties throughout the foreclosure process, a responsibility that banks often neglect. Banks that fail to maintain the properties will be forced to pay stiff penalties that can then be used by localities to enhance their enforcement efforts under the Act.
The bill, sponsored in the Senate by Senate Coalition Co-Leader Jeffrey D. Klein and in the Assembly by Judiciary Committee Chair Helene Weinstein, comes amid new data showing a troubling increase in the number of zombie properties across New York State. According to RealtyTrac data analyzed by the Office of the Attorney General (OAG), zombie property foreclosures increased by almost 50 percent from 2013 to 2014, bringing the total number of zombie properties in NYS to 16,701. As a result, almost one in five residential foreclosures is now a zombie property. On Long Island, the problem continues to grow with the number of zombie homes increasing by 62 percent between 2013 and 2014, bringing the total number to 4,048 – the highest in the state.
“Ever since the housing crash, too many Long Island communities have been weighed down by the burden of abandoned and vacant properties,” said Attorney General Schneiderman. “These zombies will not to come back to life on their own – and many local communities lack the resources to effectively track them down and revive them. It’s time for the state legislature to finally pass the Abandoned Property Neighborhood Relief Act so that we can empower municipalities to take back their neighborhoods and end the proliferation of zombie properties.”
Nassau County Executive Edward P. Mangano stated, “The Abandoned Property Neighborhood Relief Act will assist my administration in continuing its commitment to protecting our communities, neighborhoods and residents by requiring maintenance and restoration of abandoned properties that have become breeding grounds for mold, crime and a welcome mat for squatters. I thank Attorney General Schneiderman for his efforts in helping to protect our quality of life.”
“Nassau County has sadly become the perfect recipe for Zombie Houses because we are still rebuilding post superstorm Sandy and fighting to bounce back from the foreclosure crisis our nation has felt over the past five years. We need legislative measures like this one to ensure our communities are given a fair chance to get the relief they need and the revitalization they deserve. I commend Attorney General Eric Schneiderman for fighting to make Nassau County taxpayers and our communities a priority,” said Nassau County Legislator Kevan Abrahams
The Schneiderman bill would address the problem of zombie properties in several ways:
First, since many families do not understand that they have the right to remain in their home until a judge declares the foreclosure complete, the bill would require that homeowners be provided with early notice that they are legally entitled to remain in their homes until ordered to leave by a court. The bill would also make it unlawful for a mortgagee or loan servicing agent, or a person acting on their behalf, to enter a property that is not vacant or abandoned for the purpose of intimidating, harassing or coercing a lawful occupant in order to induce them to vacate the property, thereby rendering it vacant and abandoned.
Second, in the event that homeowners do leave their property before the foreclosure is complete, the bill would require mortgage lenders and their servicers to take responsibility for properties soon after they have been vacated – and not, as under current law, at the end of a lengthy foreclosure process. Under this provision, lenders and their servicers are required to identify, secure, and maintain vacant and abandoned properties and pay for their upkeep. The bill would also establish a periodic inspection requirement for mortgagees and loan servicing agents to determine if property subject to a delinquent mortgage is currently occupied.
Third, to help municipalities identify and secure zombie properties, the bill would require mortgagees or their agents to electronically register these properties with a newly-created statewide Vacant and Abandoned Property Registry to be established and maintained by the OAG. The registry would be supplemented by a toll-free hotline that community residents can use to report suspected vacant and abandoned properties to the OAG and receive information regarding the status of registered properties, including the identity of the mortgagee or agent responsible for maintaining them. Banks that fail to register an abandoned property will be subject to civil penalties.
One of the new provisions of this year’s Abandoned Property Neighborhood Relief Act would direct penalties for noncompliance into a fund for local municipalities to support code enforcement and related efforts to address zombie properties within the municipality where the violations occurred. Another new provision would create an expedited foreclosure process for properties that are confirmed to be vacant.
The Abandoned Property Neighborhood Relief Act is one component of Attorney General Schneiderman’s broad strategy to help New York homeowners and communities recover from the foreclosure crisis. He successfully fought for a strong National Mortgage Settlement that delivered more than $2 billion in relief to New York families. He dedicated $100 million from the settlement to create the Homeowner Protection Program (HOPP), a network of free legal and housing counseling services that has served more than 40,000 families statewide – including 11,926 on Long Island alone.
Attorney General Schneiderman has also pursued relief for communities by directing funds from the National Mortgage Settlement to community “land banks,” which are nonprofit organizations that can acquire property that is tax delinquent, tax foreclosed, vacant, or abandoned and use it for a variety of purposes to counter neighborhood blight.
In June of 2013, Attorney General Schneiderman announced the Community Revitalization Initiative (CRI), which has provided $33 million in funding to land banks that are working at the local level across New York State to rebuild and revitalize their communities. In the first round of funding, which took place in October 2013, OAG disbursed $13 million to eight land banks. After passing legislation to double the maximum allowable number of land banks, Attorney General Schneiderman disbursed an additional $20 million in a second round of funding in October 2014. The Suffolk County Land Bank Corporation has received approximately $2.6 million of these funds.
Assemblyman Charles Lavine said, "Attorney General Schneiderman's zombie property bill would address one of the most stubborn legacies of the housing crisis, while rehabing homes and uplifting neighborhoods across Long Island."
“When I was elected, I made it a priority to address the abandoned homes that plague our community,” said Assemblyman Todd Kaminsky. “That's why I'm working with Nassau County to build a database that will track these properties, and clean them up. Attorney General Schneiderman's bill will greatly help us deal with zombie homes on Long Island. I am happy to co-sponsor this bill, and look forward to working with him on continuing our efforts to hold banks accountable and clean up abandoned properties throughout the state.”
"Our residents work hard to pay their mortgages and tax bills, and they also take the time to maintain the pristine conditions of their homes and properties. It is simply unfair for them to have to live in the same neighborhood as a zombie property, and often have to foot the bill for its cleanup, maintenance and demolition," said Hempstead Town Supervisor Kate Murray. "Thank you to Attorney General Eric Schneiderman for bringing our fight to the state level, and I urge legislators in Albany to pass this important proposal, and help rid our communities of zombie properties."
Michael Reid, Director of the Firemen’s Association of the State of New York (FASNY) said, “Zombie homes are prime targets for the type of arson and criminal activity that put firefighters at risk every day. Attorney General Schneiderman’s bill would end the proliferation of zombie homes across Long Island and have a major, positive impact on fire fighters across our state. I encourage the state legislature to pass this bill right away.”