Banks steal millions from Rockland homeowners after leaving foreclosed and ‘zombie’ properties in disrepair

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PRESS RELEASE

unnamedLeader of the Independent Democrat Conference Senator Jeff Klein (D-Bronx Westchester) joined David Carlucci (D-Rockland/Westchester) Wednesday in Rockland to unveil“The Great American Bank Robbery: Rockland County,” a presentation that made the case over $11.4 million in property value depreciation has resulted from poorly maintained bank-owned homes and zombie properties.

Standing in front of a deteriorating zombie property, Senators Klein and Carlucci called for new legislation to monitor bank-owned homes, require banks to maintain zombie properties, levy major fines against persistent violators, and create a community reinvestment fund to rid communities of blight. “The fallout of the subprime mortgage crisis hurts taxpaying homeowners the most. Banks, who own properties through foreclosure, let homes languish in awful states of disrepair that devalue surrounding homes even though they must by law maintain these properties. Worse, zombie properties that are in the legal limbo of foreclosure rot in communities throughout the state negatively impacting property values. This is a problem across New York State affecting homeowners’ greatest assets and we must hold banks accountable,” said Senator Klein.

“Owning a home is one of the most important investments a person will make in their lifetime. For many homeowners who have settled down in Rockland, zombie properties that have fallen into disrepair have blighted communities while simultaneously driving down property values. Rather than stand by and accept zombie properties as the status quo, we must adopt strict measures that will stem the tide of property value depreciation in Rockland,” said Senator Carlucci.

Senator David Carlucci explains how zombie properties have cost Rockland homeowners $11.4 million in property value depreciation
Senator David Carlucci explains how zombie properties have cost Rockland homeowners $11.4 million in property value depreciation

In Rockland, zombie properties plague the county, accounting for a whopping $9.8 million in property value depreciation, explained Carlucci. Bank-owned homes resulted in $1.8 million in property depreciation. Studies show that homes within a 300-foot radius of a bank-owned or zombie home depreciate by 1.3 percent, an average $5,000. Wells Fargo is in the process of foreclosing on the majority of zombie properties in the area. In Rockland County, 272 zombie properties impact 1,897 surrounding homes. Nearly 50 of those properties are awaiting foreclosure by Wells Fargo. The abandoned homes cost homeowners in Rockland $9.8 million in lost property value.

To combat community blight and protect property values, Senators Klein and Carlucci called for the passage of legislation to hold banks more accountable for properties they own, passage of legislation to require banks to maintain zombie properties, the establishment of major fines for violators, and the creation a community reinvestment program. The bank-owned property bill would increase transparency by creating a registry of foreclosed, vacant and abandoned properties in the state for the disposal of municipalities and the Office of the Attorney General, and grant the Attorney General the right to impose fines of $1,000 per property and initiate legal proceedings against financial institutions violating of the law.

The zombie property legislation would require mortgagees and their loan servicing agents to maintain vacant properties from the point they are discovered to be abandoned, create a statewide registry of vacant and abandoned properties, and require the attorney general to set up a toll-free hotline for neighbors and community residents to report properties that they believe to be vacant and abandoned, report problems, as well as to find out information regarding the foreclosure status of these properties. The bill would also levy civil fines for violations – up to $1,000 per day for each day the violation has persisted.

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