New York State Attorney General Eric Schneiderman is seeking to hold banks responsible in maintaining the State’s growing number of “zombie properties” - homes that have been vacated by homeowners in advance of  completed foreclosures.

New York State in particular has been severely plagued with zombie properties since the housing market crashed in 2007. Over 15,000 “zombie properties” are littered across New York, nearly 20% of the total foreclosed properties in the state. The abandoned properties fall into disrepair, leaving no one responsible for regular maintenance and upkeep. The open vacancy attracts vagrants and squatters, causing an increase in vandalism, crime, and decay. The deteriorating houses create a dangerous environment for local residents and burden local law enforcement officials who are not equipped to handle the sudden increase in crime, leading to a decrease in property value of the surrounding neighborhood.

When banks send foreclosure notices to families who have fallen behind on their mortgage payments, homeowners often abandon the property prematurely. They are unaware that they have the right to stay inside their homes until a full foreclosure has been declared by a judge. This process could take an extended period of time. In New York State, a foreclosure may take close to 3 years to complete - the longest amount of time required by any state.

Furthermore, since the foreclosing banks are legally required to maintain the property after the foreclosure has been completed, the State Attorney General has found evidence that banks often delay the process even further in order to avoid responsibility on houses that are difficult to sell.

The developing legislation outlined by the Attorney General would hold the lending banks responsible for the properties shortly after they have been abandoned. The law would allow the state to define what constitutes as an abandoned property and require the banks to maintain the premises immediately - closing the loophole of waiting until the end of a delayed foreclosure process.

Banks would be required to notify delinquent homeowners that they have the right to continue living in their homes until a judge has declared the foreclosure official. It would also create a statewide database for the location of the zombie properties. Should the bill pass, banks will be fined a potential $1,000 for every day an abandoned property goes unregistered and under-maintained.

Attorney General Schneiderman is also proposing a separate bill that would increase funding and double the amount of land banks available in New York State. Land banks are nonprofit organizations funded by the state that pay to restore vacant properties.

Mr. Schneiderman has championed other statewide initiatives that seeks to prevent the rapid spread of the “zombie house” epidemic. The Attorney General’s office has committed $60 million to help struggling New York families with financial and legal counseling regarding their mortgages.  The “Homeowner Protection Program” (HOPP) advocates on the homeowner’s behalf, fills out all necessary paperwork and documentation, and negotiates more affordable loan modifications. The program has helped over 23,000 homeowners avoid foreclosure and lower their monthly payments. 

The housing market crash has left millions of families struggling with unaffordable monthly payments on their high priced loans. “Zombie Properties” are detrimental to a housing market still struggling to recover.  Derelict properties affects the surrounding neighborhood, decreasing the property value of houses that have already been hurt by the mortgage crisis. I applaud the efforts of Attorney General Eric Schneiderman. I encourage you to call your local councilman and voice your support for the developing bill.