New legislation slated to be reintroduced this year would require lenders to maintain vacant properties while they are in foreclosure, or allow the troubled borrowers to stay in the house until ordered out by a judge.
Lenders in New York could be in for a shock if new legislation passes requiring them to maintain zombie homes or allow the troubled borrowers to stay in the house until ordered out by a judge.
New York State Attorney General Eric Schneiderman announced he plans to resubmit an expanded version of the legislation he proposed last year, known as the “Abandoned Property Neighborhood Relief Act” or “Zombie Property Bill”.
The legislation would require mortgage lenders to identify, secure and maintain vacant and abandoned properties earlier in the foreclosure process, creating a registry of abandoned properties, according to a release from Schneiderman. The bill would also require that homeowners be provided with early notice that they can legally stay in their home until a court orders them out.
One in four foreclosures is a zombie home
What’s different about this year’s proposed bill is the creation of a fund that would allow local government to hire more code enforcement officers, which would be paid into by fines levied against banks and lenders for noncompliance with the law, according to the Times Union.
In New York, the problem of zombie properties increased nearly 50% in 2014 compared to 2013, Schneiderman said. There were about 16,700 zombie foreclosures across the state last year.
