Zombie properties results when residential properties are vacated or abandoned by an owner in default on their mortgages. In an article in the Westchester Business Journal on June 1, 2015 by John Golden, he points out that Gov. Andrew Cuomo recently announced New York State’s agreement with 11 banks, mortgage companies and credit unions that represent 70% of the New York mortgage market. The agreement is to eliminate neighborhood blight of vacant properties where owners face foreclosure. There are about 16,700 zombie properties statewide in 2014. Lenders met to address the zombie property problem. New York State is expected to implement by August, 2015 that lenders agreed to conduct an exterior inspection of the property within 60 days of delinquency to determine vacancy and abandoned properties and every thirty days thereafter.

If the property is found to be vacant and abandoned, the lender will secure each unit by changing the locks, replacing or boarding up windows, posting the property with contact information and eliminate safety hazards. Lenders will also notify New York State’s Department of Financial Services of any new property to be added to the State’s reporting of vacant and abandoned properties. The Financial Services Department will accept complaints from neighbors or local officials about vacant properties.

Under existing law property owners are responsible for the maintenance of their properties. Bank and mortgage companies are not required to maintain vacant and abandoned properties until they receive a judgment in foreclosure. The Abandoned Property Neighborhood Relief Act has been introduced in the New York Legislature. New York Attorney General, Eric T. Schneiderman called the agreement “a welcome step forward to stop the epidemic of vacant zombie homes”.

On May 4, 2015, The Westchester County Business Journal published an article by Reece Alvarez entitled “Schneiderman takes aim at the zombie property plague”. His efforts are to stem the growing plague of abandoned foreclosed homes. He made a second announcement in April, 2015 building off of legislation that failed to pass both the Senate and Assembly. He is working with legislators to reintroduce the new “Abandoned Property Neighborhood Relief Act” to stem the rising tide of zombie homes across New York State.

According to the Office of the Attorney General, they compiled information from Realty Trac, a California based realty information company, that zombie property foreclosures increased by 50% from 2013 to 2014 bringing the total number of abandoned properties in New York State to 16,701. Almost 1 in 5 residential foreclosures are now zombie properties. In New York City the problem continues with zombie homes increasing by 38% between 2013 and 2014 to a total of 3525 properties.

Statewide foreclosure trends from Realty Trac shows Orange County with the highest rates of foreclosures in the month of March, 2015. In Westchester, the Town of North Salem and its hamlet of Croton Falls are the highest foreclosure rates in addition to Buchanan, Elmsford & Cortlandt Manor. According to Realty Trac, a quarter of North Salem homes are in active foreclosures. The Town Supervisor Warren Lucas calls on property owners (i.e. banks) to mow the lawn and rake the leaves. He is in favor of the State Legislation so they can go in and clean the property up and put it on the tax bill. He is in favor of Schneiderman’s “Abandoned Property Neighborhood Relief Act” that includes “stiff penalties” for banks that fail to maintain properties. Schneiderman’s proposed legislature requires mortgage lenders to take responsibility for properties soon after the property has been vacated and not at the end of a lengthy foreclosure process. At present, the bank does the foreclosure but doesn’t finish the process so that property doesn’t really belong to anyone and the properties sit vacant and deteriorate. “Drug users break in and use the property and sets fires in them”. The new law addresses the question of ownership by requiring mortagees or their agents to electronically register zombie properties with a newly created statewide vacant and Abandoned Property Registry to be established and maintained by the Office of the Attorney General. Banks that fail to register an abandoned property will face civil penalties. Large banks have been an impediment to progress. The whole zombie concept of either bank owned or in process foreclosure, properties have been a problem for a number of years and local municipalities welcome the State to pass legislation.

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