When a West Seneca resident fell behind 90 days on her mortgage, she received a tersely worded letter from the bank and feared she had lost her house.
“The notes you get from the banks are pretty mean,” said Councilman William P. Hanley Jr. “They’re written by some very sharp attorneys. When you get these letters you think ‘I’ve just lost my house’ when it’s not true.”
The resident could’ve tried selling her house before the foreclosure process started and walked away with some money for a fresh start, Hanley said. Instead, she just walked away, leaving a vacant house behind.
Now, the town is taking steps to help prevent that situation from playing out again. The town is applying for a grant of up to $350,000 from a new $13 million pool of state funds aimed at tackling “zombie homes.”
Zombie homes are properties stuck in incomplete foreclosure. After homeowners move out, the homes often fall into disrepair, dragging down neighbors’ property values and attracting crime.
Fifteen Western New York communities, including West Seneca, are among a hundred across the state identified last month by State Attorney General Eric T. Schneiderman as eligible for the funds.
The funds for the state program, called the Zombie Remediation and Prevention Initiative, come from the $3.2 billion settlement agreement between New York and Morgan Stanley that Schneiderman’s office negotiated.
West Seneca hopes to use its award to contract with the Western New York Law Center to provide free legal advice to homeowners who receive those 90-day delinquent letters, Hanley said.
“The homeowner usually panics, worries about what they’re going to do,” he said. “They let their house fall apart. They give up hope and they lose their home.”
The town typically finds out that a homeowner is delinquent well after the foreclosure process has started, about a year after mortgage payments stop, Hanley said.
“We want (Western New York Law Center) to be involved at the 90-day mark,” he said. “We want to get residents help earlier in the process.”
The proposal may be a model for other communities dealing with a zombie problem, Hanley said.
A series of recent initiatives in the town has been effective at reducing its number of “zombie homes” from about 93 two years ago to 23 today, Hanley said. One such campaign by Assemblyman Michael Kearns, D-Buffalo, and town officials has worked to publicly shame banks into completing the foreclosure process and maintaining the homes while they’re vacant.
Communities must submit applications for the grants by Aug. 16, and the awards will be made by early September.
“We don’t think it’s fair a resident pays their mortgage for 20 years, falls behind 90 days and gets kicked out of their house,” Hanley said. “To me that’s not a fair process.”