ALBANY, N.Y.— Bethpage FCU has joined with New York’s regulators and other lenders as part of an effort to monitor and maintain vacant properties in order to fight neighborhood blight.
According to the New York Department of Financial Services, the banks, mortgage companies and credit unions involved represent nearly 70% of the New York market and have agreed to adopt practices to limit the damage from so-called "zombie properties.” Among the practices to be instituted are checking on any residential property within 60 days of a loan going delinquent to determine if they are abandoned.
In addition to Bethpage, other lenders involved include Wells Fargo, Bank of America, Citi Mortgage, Ocwen, Nationstar, PHH, Green Tree Servicing, Astoria Bank, M&T Bank and Ridgewood Savings Bank.
"The wave of zombie properties that arose in the wake of the financial crisis harms local communities and threatens the long-term health of the mortgage market," department Superintendent Ben Lawsky said in a statement. “Many homeowners defaulted on mortgages in the aftermath of the 2008 national financial crisis when the housing bubble burst. These common sense actions are an immediate and vital part of repairing that damage as we continue to pursue additional legislative reforms.”
According to the state, after the initial external inspection within 60 days, the lenders are to check the property every 25 to 35 days. If they determine it's abandoned, they will secure it by posting a notice with their contact information, change at least one door lock, board up any broken windows and doors and remove nuisance features and fix significant safety issues. Properties will be put on a state list to be shared with municipal authorities.
The determination of abandonment will be based on at least three consecutive inspections where there's no evidence of occupancy and the property is not being maintained.
Attorney General Eric Schneiderman, who proposed legislation to require lenders take those and other steps, noted recently that zombie foreclosures increased 50% from 2013 to 2014, bringing the total statewide to more than 16,700. He said Monday that they burden communities with maintenance costs, lowered property values and crime.