Legislation about Zombie Properties #ZombieHomes
I have been eager to post about the abandoned properties legislation. There are new developments in Indiana and New York. But the truth is I really don’t know what to say. Looking at the New York Bill A06932 / S04781, I like it but I have many concerns. I have no idea if these concerns are legitimate. I have not yet really read the Indiana law SB 415. So I am not competent to pass any useful information about this important area of zombie foreclosure law.
In New York it is being called zombie properties by many news outlets and that language is championed by Attorney General Schneiderman. The bill aims to charge the banks to repair any abandoned properties on which they hold mortgage. In Indiana, the Governor has signed a new law that seems to do the opposite making it difficult for the local towns to pursue the banks, but also changed some tax code to maybe make sale easier.
I still want to know where the homeowners went? I want to know why the government law isn’t aimed to more directly help those people? As far as I can tell the Indiana law protects the banks and the New York bill empowers local governments (the upstate mayors like it and this week was the Nassau County photo-op and opportunity for the AG to sit across the table with the Nassau County Executive). It’s nice to see the cross-party collaboration but what about the previous homeowners, where are they at the table? Taxed out maybe? And now they’ll send bank inspectors to the houses to see if any people still live there, force the bank to mow the lawn, pay the taxes, and start short selling. Some of these families’ properties went financially underwater in the bank crisis and then literally underwater during Superstorm Sandy. Why isn’t government forcing the banks to make principal reductions and interest rate modifications to bring the loans to current fair market value? Let the owners get the windfall instead of the banks or the towns. Let the economic flood waters wash away the debts not the homeowners. ?
All we hear about are the abandoned homes, what about the one’s with people still struggling to keep them? The zombie debt crisis isn’t just the abandoned homes and the visible blight. We’re still in the same sinking float of the bank-crisis induced, robo-signed mortgage, collateralized debt, quantitative easing, too-big-to-fail, foreclosure hell. What seems clear is that many politicians want to talk about abandoned blight and not the underlying financial apocalypse. Of course we need to clean up the blight, but there are also a lot of healthy-looking zombies out there, and I might prefer a broader legislative package to help more of those other zombies find agreeable settlement.
Is the New York bill as surely a “no-brainer” as the Attorney General has said (see Newsday: “Schneiderman: Legislation to combat plague of zombie houses on LI ‘is a no-brainer’” by Carl McGowan)? The legislation has some teeth to fine the banks, and even some zombie eyes in the form of bank inspectors checking the properties. How would it actually affect the world? I have no idea but that’s no problem, it’s a promised “no-brainer”, no need to think about it, right? So we don’t need to ask why the bill creates a special foreclosure court part? What’s wrong with the regular foreclosure proceedings? What judicial protections might be lost in an expedited special foreclosure process? Will robo-signed notes be as extensively scrutinized as they should? How will it affect the other cases remaining on the regular foreclosure docket? Where’s Governor Cuomo on this issue? And how will this be affected by who he appoints as the next Chief Judge to replace Lippman?
On all these questions, I have no idea. This post has been a a real no-brainer.