Bill would force banks to maintain 'zombie' homes

Bill Cary | The (Westchester, N.Y.) Journal News

Looks like good news for the neighbors of so-called "zombie properties" that have been abandoned by homeowners in foreclosure.

State Attorney General Eric Schneiderman plans to introduce legislation this session that would force banks and other mortgage lenders to maintain the vacant properties while they are in foreclosure. The banks would face fines for noncompliance.

The bill would also require lenders to tell homeowners that they can stay in their homes until ordered out by a judge. Often homeowners abandon the house as soon as they get a notice of foreclosure, leaving behind unkempt lawns, fallen tree limbs, broken windows and other signs of disrepair.

State lawmakers failed to enact a similar law last year.

Called the Abandoned Property Neighborhood Relief Act, the proposed bill would also create a registry of these vacant properties to help municipalities enforce local laws regarding property maintenance. Any fines imposed under the law would go into a fund to help municipalities hire more code-enforcement officers.

Statewide, the problem of zombie properties has increased nearly 50 percent in 2014 compared to 2013, Schneiderman said. There were about 16,700 zombie foreclosures across the state last year.

Nationally, New York comes in behind Florida and New Jersey with the third-highest number of zombie properties, according to RealtyTrac.

"The greater New York metro area had by far the highest number of zombie foreclosures of any metropolitan statistical area nationwide, with 19,177 — 17 percent of all properties in foreclosure and up 73 percent from a year ago," according to RealtyTrac's first-quarter Zombie Foreclosure Report.