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NY Zombie Home Registry

May 21, 2014

Press Release from New York Attorney General: “A.G. Schneiderman Launches Statewide Effort To Combat Zombie Properties”:

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 Attorney General’s Abandoned Property Neighborhood Relief Act will hold banks accountable for so-called zombie properties.

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 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.

zombie eric schneiderman new york

The plan is endorsed by Jamestown Mayor Sam Teresi who is quoted:

“The proposed zombie property legislation crafted by Attorney General Schneiderman and his office has my full support as the Mayor of Jamestown. …”

Also endorsed by the editors at The Daily Gazette: “Cities need to be protected from “zombies”“:

Cities like Schenectady are being threatened by zombies… We encourage the Legislature to quickly pass this bill.

The bill is “Bill S7350-2013

TITLE OF BILL: An act establishing the “New York state abandoned property neighborhood relief act of 2014”; and to amend the real property actions and proceedings law, in relation to the duty of the mortgagee or its loan servicing agent to maintain property secured by delinquent mortgage

See also from Reuters: “New York atty general combats ‘zombie houses’ after Reuters probe” by Michelle Conlin.

Recall previously, Michelle Conlin has written extensively in Reuters about zombie foreclosures.

zombie mayor sam teresizombie michelle conlin reuterszombie darren blomquist realtytrac zombies

Personally, I am skeptical of the effectiveness of this program and still wonder what about about the homeowners who haven’t abandoned but are still trying to work with their bank? They still need help too! Where’s the legislation to require loan modification, reductions of interest rate to current market and principal reductions. This is what TARP should have done, but instead it bailed out a few big banks and (re)insurance companies. Where is the help for the common zombie!?

Schneiderman’s plan to make banks responsible for empty homes is laudable, but it doesn’t go far enough. The banks must be held more responsible for their role in the real estate induced CDO crisis. It’s going to happen again because they got away with it the first time.

Also, it is noted that the banks will sometimes stop the foreclosure process in order to not take possession of the property. Do they simply not want to take the costs of possession because the property is so far underwater that it can’t be sold (even for a tax write-off in these years of profit?!), or is it that they can’t?

Is it that they bank’s mortgage note was mishandled, lost, destroyed, improperly robo-signed? Could the Attorney General force a mandatory audit and disclosure by the banks of all the properties that are encumbered with questionably void notes. Maybe that is already disclosed somewhere(?) but I suspect is is not. How often do banks need to audit the condition of their mortgage notes until there is an actual foreclosure process fight over the quality of that note and the need to dig it out of storage for production. If the banks records aren’t prepared to be able to actually find the correct paperwork then maybe they can’t foreclosure?

Can the AG force the banks to audit their records and disclose which secured mortgage notes are currently in this questionable improperly robot-collateralized condition and that they may never be able to foreclose? They wouldn’t want to admit it, they are perhaps still gambling that some irregularities of the boom are never unveiled. They might pay the ongoing fines and hope to eventually short-sell out of the situation. But why not short-sell to the original buyer, perhaps with significant government backing. Use government low interest rate money to put the original homeowners back in their properties at reduced rates.

This list of vacated homes and billing the banks for maintenance is a good start to forcing the banks to serious negotiation, but where is the original homeowner? Can’t we get them back in their house? Bring the zombies home!

From → debts, economics, money

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