New York City says lenders and servicers are allowing abandoned homes to become havens for squatters, drugs and sex
New York City is suing Wells Fargo, Citi and Ocwen for allegedly letting abandoned houses fall apart and become havens for drugs, sex and squatters as the homes inch through the foreclosure process.
The city’s Department of Housing Preservation and Development (HPD) filed lawsuits Wednesday, accusing Wells Fargo, Citi, Ocwen and others of ignoring their responsibility to maintain abandoned homes in Brooklyn according to NBC 4 New York.
In 2016, New York state passed a “zombie home” law that requires banks and their subcontractors to inspect houses in the foreclosure process – and, in cases where the owners have abandoned the properties, take over maintenance.
“Our goal is to get these banks to take accountability for these properties,” HPD Deputy Commissioner Leila Bozorg told NBC 4.
One of the homes targeted in the lawsuit had waist-high weeds sprouting from a mound of garbage on the front porch, according to NBC 4. CitiMortgage and its servicing company, the entities responsible for maintaining the home, have allegedly done nothing.
“My mother actually did call the bank about it, and they repeatedly said they’re going to do something about it,” next-door neighbor Geoffrey James told NBC 4. “It’s been years and nothing has been done.”
Wells Fargo and Ocwen have also been accused of letting zombie homes fall into disrepair.
“To be honest, it’s not safe,” Marco Lopez, who lives next door to one of the homes, told NBC 4. “A lot of people go in there for drug use or random sexual encounters.”
Lopez said that on one occasion, someone using drugs in the abandoned home overdosed and died there.
Kevin Friedlander, a spokesman for Wells Fargo, told NBC 4 that the bank “does not have ownership” of that home and referred the station to Ocwen, the property’s loan servicer. Ocwen spokesman John Lovallo said that the company was conducting a “thorough review” of the property.
The HPD said that New York law clearly designates both lenders and servicers as responsible parties when it comes to keeping foreclosure properties safe and secure, NBC 4 reported.
“We have our surveys and the photos and our work with the law department of the city of New York to prove that we don’t’ think they’re in compliance,” Bozorg said.
State law calls for a penalty of up to $500 for each day that an abandoned foreclosure property fails to meet health and safety standards.
