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Legislation holds Mortgage Servicers more responsible for Zombie Houses

One of the biggest problems with solving the zombie property crisis is getting the owners to rectify the situations. Unfortunately, holding the owners accountable can be problematic, especially when there are mortgage servicers involved. If municipalities don’t have proper access names and phone numbers during foreclosure proceedings, chances are the properties are left to rot. That’s why Assemblymember Monica Wallace and State Senator Tim Kennedy have announced legislation (A.6976 and S.4190) that requires mortgage servicers to list names and phone numbers during foreclosure proceedings, giving municipalities an easier way to contact responsible parties, thus ensuring maintenance obligations are enforced.

Many of the problematic zombie houses are the result of the 2008 housing crisis, according to Wallace and Kennedy. As more and more foreclosures came about, property upkeep such as overgrown grass, broken windows, peeling paint, and water damage, became more commonplace. These compounded issues of neglect resulted in neighborhoods experiencing broad devaluations, elevations in crime, and unprecedented pest and squatting problems. A blighted house can get out of hand very quickly, which is a concern for an entire neighborhood. 

This new legislation is in place to hold mortgage servicers accountable, if they are neglectful in their maintenance duties. Moving forward, they are now on the hook to keep foreclosed residential properties in “safe and habitable condition.” Those that do not, must now directly answer to the municipalities; in the past, the servicers could skirt detection. That is no longer the case.

“When mortgage servicers neglect their obligations to keep their properties in foreclosure in safe and habitable condition, it’s the neighbors and local governments that suffer,” said Assemblymember Wallace. “This legislation gives local governments an easy and efficient way to contact mortgage servicers to ensure that their maintenance obligations are enforced. By doing so, we are protecting neighborhoods from unsightly and potentially dangerous conditions created by zombie foreclosures.”

“Too many times, residents have felt helpless as they watch zombie properties deteriorate their neighborhoods, causing their property values to plummet. Through this legislation, New York State is empowering municipalities across New York State to hold mortgage lenders accountable,” said Senator Kennedy. “By requiring these institutions to provide their names and contact information prominently during foreclosure proceedings, municipalities will be able to more effectively ensure these problem properties are documented, tracked, and remediated as quickly as possible, so that our neighborhoods can be restored to their original character and charm.”

“One of the biggest issues municipalities have in enforcing the Zombie Foreclosure law is knowing what servicer to hold responsible for maintaining the vacant and abandoned property,” said Kate Lockhart, Vacant and Abandoned Property Program Director at the Western New York Law Center. “Some banks and mortgage servicers are proactive in their maintenance of Zombie properties, but there are still many servicers that wait to be forced into compliance by a municipality. By requiring the servicer’s information be listed within several of the foreclosure documents throughout the process, we make it easier for municipalities to weed out bad actors. We at the Western New York Law Center are grateful for our partners in government, Senator Kennedy and Assemblymember Wallace, for their dedication to the elimination of blight in our communities and the preservation of neighborhoods.”

Lead image: Photo by Joe Collins

Written by queenseyes

queenseyes

Newell Nussbaumer is 'queenseyes' - Eyes of the Queen City and Founder of Buffalo Rising. Co-founder Elmwood Avenue Festival of the Arts. Co-founder Powder Keg Festival that built the world's largest ice maze (Guinness Book of World Records). Instigator behind Emerald Beach at the Erie Basin Marina. Co-created Flurrious! winter festival. Co-creator of Rusty Chain Beer. Instigator behind Saturday Artisan Market (SAM) at Canalside, Buffalo Porchfest, and Paint vs. Paint. Founder of The Peddler retro and vintage market on Elmwood. Instigator behind Liberty Hound @ Canalside. Throws The Witches Ball at Statler City, the Hertel Alley Street Art Festival, and The Flutterby Festival.

Contact Newell Nussbaumer | Newell@BuffaloRising.com

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