Lawmakers combat “zombie properties” statewide

BY ERIKA NORTON
WOODBURY — New York State lawmakers, including local Assemblyman James Skoufis (D-Woodbury) have a new target affecting neighborhoods statewide - “zombie properties.” Both the State Assembly, and more recently Governor Andrew Cuomo, have passed legislation to make banks more accountable for vacant properties and give greater rights to homeowners facing foreclosure.
“Too many homeowners have been targets of questionable lending practices and have suffered losses in the recession, they now find themselves facing foreclosure,” Skoufis said in a press release. “We need to give people all the help we can to make sure they can stay in their homes as long as possible.”

What are "zombie properties?"

The problem is that these vacant homes sit neglected for years on end, not because the owner cannot sell them, but because they are stuck in foreclosure process “limbo” due to banks dragging their feet in court. During this time, many of these homes fall into disrepair, some attracting squatters and crime to the community.
As a result, a recent analysis showed that property values drop 1.4 percent for neighbors who live within a 1/8 mile radius of a “zombie property,” according to Skoufis. There are an estimated 3,000 to 4,000 zombie properties throughout Orange County, including cities, suburban areas and rural towns.
In total, there were roughly 16,700 zombie foreclosures statewide in 2014, an increase of 50 percent from the previous year, according to Attorney General Eric Schneiderman’s office.

Assembly bill

The New York State Abandoned Property Neighborhood Relief Act of 2016, passed in the Assembly on May 23 and co-sponsored by Skoufis, aims to alleviate this problem by:
requiring earlier detection and maintenance of abandoned and vacant residential properties;
expanding the existing property maintenance responsibilities of a bank to include homes in pre-foreclosure;
allowing localities and the Attorney General to enforce the maintenance of property requirements;
and creating a statewide registry for abandoned residential properties and a toll-free number for residents to report them.
Skoufis also launched a “bank-shaming” campaign in April, calling out specific banks in the Hudson Valley for stalling the foreclosure process at a given property. One such property located in Washingtonville had been stuck in the foreclosure process for nearly three years due to Wells Fargo’s inaction, according to Skoufis.
The top three lenders associated with these properties, according to Skoufis, are Bank of America, JP Morgan Chase and Wells Fargo. As part of his campaign, Skoufis has been posting signs on “zombie properties” through the local area, shaming the specific bank responsible.
In opposition to the State Senate version of the “zombie property” bill, the Mortgage Bankers Association of New York released a statement earlier this month.
“It is very probable that many lenders will leave the state,” according to the statement, “due to the legal risk and financial burden that will be placed on them when properties become vacant and abandoned.”

Cuomo signs “zombie property” law

More recently, Gov. Cuomo signed this year’s annual end-of-session omnibus package on June 23, which included a piece dealing with “zombie properties.” The legislation includes almost identical measures aimed at assisting homeowners facing mortgage foreclosure, improving the efficiency and integrity of the mandatory settlement conferences, establishing a pre-foreclosure duty to maintain on mortgagees, creating an expedited foreclosure process for vacant and abandoned properties, and creating an electronic vacant property registry.
Under this law, the bank has a duty to maintain and secure a vacant and abandoned residential property, facing civil penalties up to $500 per violation, per property, per day for failing to do so. The law also includes the creation of a Consumer Bill of Rights, which aims to help homeowners avoid vacating their homes early in the foreclosure process because they are unclear about their rights or are facing pressure to vacate.
“For many New Yorkers, homes are our single most important investment, but that investment can be undermined by the blight of neglected and abandoned properties,” Governor Cuomo said in a press conference. “For each zombie home that we cure and for each that we prevent with this legislation, we are saving entire neighborhoods from the corrosive effect of blight and neglect. I thank my colleagues in the Assembly and Senate for seeing a crisis and helping to turn it into an opportunity for people to realize the great American Dream of homeownership.”
Skoufis said that he is pleased with the measures within the legislative package signed by Gov. Cuomo, which contains many elements of the Assembly “zombie property” bill.
“There’s always the possibility of further action,” Skoufis said. “I think the legislators who cared about this issue (myself included) are pleased with the progress represented in the new law.”