The state of New York is taking legal steps to battle the blight caused by vacant and abandoned foreclosure properties, (aka) foreclosure zombies properties. Governor Andrew M. Cuomo, announced this week that the Department of Financial Services has proposed a regulation that mandates banks and mortgage services to report and maintain vacant and abandoned properties in accordance with the new law.
Under the law, bank and mortgage servicers must complete an inspection of a property subject to delinquency within 90 days, and must secure and maintain the property where the bank or servicer has a reasonable basis to believe that the property is vacant and abandoned. Banks and mortgage servicers are required to report all such vacant and abandoned properties to the Department of Financial Services and submit quarterly reports detailing their efforts to secure and maintain the properties, and any foreclosure proceedings.
If the Department of Financial Services determines that a property that has been deemed vacant and abandoned is not being properly maintained by the relevant bank or mortgage servicer, the Superintendent will exercise her authority to hold the bank or mortgage servicer accountable. Violations are subject to a civil penalty of $500 per day per property.
Lenders and servicers who violate the law will face a civil penalty of $500 per day per property. The new law goes into effect on December 20, 2016.
“Abandoned homes are a blight on New York communities, and the longer they are allowed to fall in disrepair, the lower property values for entire neighborhoods are dragged down,” Governor Cuomo said. “This regulation is another step toward combating the scourge of vacant and neglected properties, and will ensure that banks and mortgage servicers are held fully accountable for complying with their obligations under this new law.”
Superintendent of Financial Services Maria T. Vullo said, “Under Governor Cuomo’s leadership, New York passed groundbreaking “Zombie” legislation that will provide real relief to communities all across the State. DFS will take necessary and appropriate action to make sure this law is followed and those responsible are held accountable.”