Lawmakers propose bill targeting ‘zombie houses’ - The Buffalo News

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Lawmakers propose bill targeting ‘zombie houses’

The healthy housing market in Western New York hasn’t been enough to get so-called “zombie houses” out of foreclosure limbo and back on the market, according to several local lawmakers. They are proposing new legislation to help change that.

While lenders have criticized state regulations that they say prolong foreclosures, State Sen. Tim Kennedy and Assemblyman Michael Kearns said at a news conference Thursday that it is the banks and mortgage companies themselves that often hold up the process, leaving properties sitting vacant for years in otherwise stable neighborhoods.

Kennedy said he is putting forward legislation to make it a criminal offense for a lender to let a house it is holding fall into disrepair and contribute to neighborhood blight, and he has specific guidelines for classifying a house as “abandoned.”

“Banks and other lending institutions have proven to be poor neighbors,” Kennedy said.

His plan would make property abandonment by a lender a misdemeanor offense of criminal negligence, punishable by a $10,000 fine and up to six months in jail.

Kearns wants to require banks and other lenders to provide accurate contact information to municipalities when they have taken over a property, so local officials and residents can notify them of problems.

“The banks are too big to fail? Well, what about the neighborhoods? They are too important to fail,” Kearns said.

Mayor Byron W. Brown and South Council Member Chris Scanlon joined the state representatives in front of a long-vacant home on McKinley Parkway to voice their support for the legislation.

They noted that the many well-maintained homes on the Olmsted-designed parkway were a sharp contrast to the house behind them, with its sagging gutters, peeling paint and weed-choked lawn. It has been empty for about five years, with taxes paid by a mortgage company based in Michigan.

“To have a vacant property like this on a street like this is a frustration for the neighborhood and for officials,” Brown said.

The lawmakers’ proposals follow the recent signing into law of the “Certificate of Merit” requirement that lenders provide proof of their right to foreclose on a house as soon as they begin legal action. According to the state attorney general’s office, some financial institutions deliberately would delay filing this paperwork, which is necessary for a homeowner to set up a settlement conference for the property.


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