Kennedy: banks and communities must work together to maintain zombie properties

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Last week, the city of Troy filed a lawsuit against a lender and mortgage agent, alleging that the companies had failed to comply with New York real estate laws requiring vacant residential properties blocked by foreclosure to stand.

Behind the lawsuit is the Zombie Property and Foreclosure Prevention Act of 2016, which requires banks and service agents to ensure that homes abandoned by homeowners who can no longer pay the mortgage don’t become neighborhood horrors. before a final foreclosure judgment is secured.

The law is a new tool for communities that saw “zombie” properties on the rise during the housing collapse of the Great Recession. It requires lenders / service agents to register abandoned homes of one to four families – a list the state will share with localities – and prevent them from becoming health and safety risks. Failure to do so may result in a fine of $ 500 per day per violation.

The Troy lawsuit alleges 66 violations at the Lansingburgh home, documented by photos from code enforcement officers, including failure to repair a damaged roof, seal broken windows, remove fallen trees and piles brush and clean an accessory garage.

Kate Lockhart, director of the Vacant and Abandoned Properties program at the Western New York Law Center in Buffalo, has experience with “zombie law,” as she calls it, to help communities bring complaints to encourage compliance.

The non-profit center, in addition to offering assistance on consumer debt and foreclosure prevention, works with the Erie County Zombies Initiative, a program started in 2019 by County Clerk Michael Kearns to help communities faced with seizures from zombies. (Kearns, a former member of the state assembly, organized “shame campaigns” that planted signs on the lawns of abandoned Buffalo-area properties to embarrass the banks holding the mortgages.)

Lockhart called the fines under the law a useful “stick” to “force their [lenders/servicers] hand ”on compliance. Maintaining abandoned homes “is really in the bank’s best interest,” she said, because they are assets that can be sold.

Threats of fines and lawsuits aside, however, Lockhart says communities can “get a lot of compliance just by working together” with banks. Few lenders have the expertise to maintain properties, she said, and therefore have had to bring in property managers and others to accomplish the yard and exterior maintenance required in under the zombie law.

At the end of the day, it’s “a lot easier to collaborate” than to continue, she said.

As the pace of home foreclosures has declined over the past decade – the state comptroller’s office noted a 46% drop in filings between 2013 and 2016 – Lockhart is worried about what will happen after COVID.

The pandemic has thrown many people out of work, pushing some local unemployment rates beyond the heights of the Great Recession. Federal and state moratoria have halted seizures for now, but “when the floodgates open” with COVID-19 contained, Lockhart fears more zombies will result.

Marlene Kennedy is a freelance columnist. The opinions expressed in his column are his own and not necessarily those of the newspaper. Reach her at [email protected]

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