Niagara Gazette

February 10, 2014

Dyster joins state attorney general for 'zombie house' discussion

By Justin Sondel
Niagara Gazette

New York Attorney General Eric Schneiderman has set his sights on the state’s “zombie houses.”

Schneiderman told a room of city officials that he will push legislation this session aimed at preventing houses left in limbo during lengthy foreclosure proceeding from becoming “zombie houses” — properties that fall into disrepair while lenders decide what they will do with the houses — during a morning session at the New York Conference of Mayors and Municipal Officials in Albany on Monday.

“We are looking to change state law so that lenders responsible for delinquent properties soon after they are abandoned, not at the end of a lengthy foreclosure process,” Schneiderman said in prepared remarks. “And we will make sure that a bank that enters into a foreclosure proceeding cannot simply walk away and leave a house to fall into ruin.”

Banks often stop foreclosure proceedings if it is determined that the value of the property – usually because it has been vandalized or fallen into extreme disrepair – is less than it would cost to complete a foreclosure process and sale. Often the mortgagee again assumes ownership without their knowledge, with any notices from the bank being mailed to the house that they had left.

Schneiderman’s bill would require lenders to maintain properties during foreclosure proceedings, a responsibility that now lies with the party being foreclosed upon until a judgement of foreclosure is granted.

The bill, which is “in development” according to an email from Schneiderman’s press office, would also create a state-wide registry for the “zombie properties.”

“There are thousands of these zombie properties plaguing communities all across this state and that’s just wrong,” Schneiderman said. “If a property is vacant and deteriorating a bank has a duty to maintain it and move swiftly to resolve the foreclosure case.”

Jessica Bacher, managing director at the Pace Land Use Law Center, has studied foreclosure issues in New York cities like Newburgh and Poughkeepsie where vacancy has become a large-scale problem.

Bacher believes a state-wide registry could go a long way towards helping municipalities struggling with vacancy issues, according to the email from Schneiderman’s office.

“A statewide registry would alleviate a significant local burden and shed light on an issue that until now has gone almost unnoticed,” Bacher said. “The registry would help to clarify the extent of the problem, so appropriate strategies and enforcement techniques can be developed and deployed.”

Mayor Paul Dyster, who is attending the NYCOM winter meeting, was one of five upstate mayors invited to have lunch with Schneiderman Monday to discuss the planned legislation.

Dyster, who described the vacancy issue as “intractable” and the biggest issue his city faces, said that he and other upstate mayors are constantly trying to address the root causes of vacancy.

“That doesn’t mean that while we’re (addressing root causes of vacancy) we can’t also work on things that control the damage done by the increasing amount of vacant buildings in our cities,” Dyster said.

Dyster said Schneiderman’s proposed initiatives will help cities like Niagara Falls by ensuring that someone is maintaining properties even as they sit in limbo during a foreclosure process.

“There’s also an awful lot that can be worked on in terms of process,” the mayor said.

Dyster said that it is encouraging to see the attorney general’s office addressing an issue that causes so many problems for upstate cities and Western New York in particular.

“The attorney general is giving us another tool that we can use to fight blight in our cities,” he said.