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As foreclosure moratorium ends, Erie County clerk fears inundation of 'zombie' homes

As foreclosure moratorium ends, Erie County clerk fears inundation of 'zombie' homes

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Erie County Clerk Michael P. Kearns is afraid of zombies. And he's worried they're going to take over the landscape in Buffalo.

Not the mindless creatures with empty eyes from horror movies that rise from the dead and attack everyone.

He's concerned about the county being overrun with empty "zombie" homes that suck the life out of their neighborhoods – abandoned by their owners because of foreclosures, and left to rot because no one takes care of them.

Kearns and others believe there's a wave of foreclosures about to hit as soon as courts start allowing lenders to start filing new foreclosures again after rule changes prevented them during the pandemic.

"We believe there is a storm or crisis on the horizon for Western New York," Kearns said. "I anticipate the courts will be inundated with new filings."

A federal moratorium on foreclosures for loans guaranteed through Fannie Mae, Freddie Mac and the Federal Housing Administration expires at the end of this month, and applies to 70% of the loans in New York State. A separate state moratorium extends until Aug. 31 but only applies to state-chartered lenders.

Ringing the bell

Kearns and his partners at the Western New York Law Center are sounding the alarm, launching a new effort to educate the public about the impending foreclosures and the potential risks of them creating zombie properties.

They can't stop lenders from going to court to foreclose, but they want to make sure that municipal officials and community leaders know how to make sure that properties aren't left vacant and neglected.

And they want homeowners facing foreclosure to know they don't necessarily have to leave their home – certainly not when they get their first notice from the lender.

"We know that people are struggling to make their payments," said Kate Lockhart, vacant and abandoned property program director at the law center. "A lot of people don’t understand the rights that they have right now."

Kearns and the law center have been on a multiyear campaign to draw attention to what they describe as a scourge of zombie foreclosures damaging Buffalo neighborhoods.

But they're more worried now because the Covid-19 pandemic kept the regular pace of problem loans bottled up for more than 15 months.

With the restrictions being lifted, they fear that those troubled loans may face foreclosure all at once.

Lockhart noted that the statewide default rate on mortgages was 2.2% in January 2020, but it soared to 11.8% at the height of the Covid-19 pandemic in late 2020, and was still at 5.3% in April. By comparison, it topped out at 3.8% in January 2009 during the Great Recession more than a decade ago.

"The delinquency rates we're seeing due to Covid are enormously higher than what we saw in the Great Recession," she said.

While a typical year sees 1,400 to 1,600 new foreclosure cases filed in court in Erie County, there were only 500 in 2020 because of the moratorium.

"Not only do we expect to see an increase because of Covid, but there would also be the backlog of cases hitting the courts at the same time," Lockhart said.

Then there likely will be a second wave, stemming from tax foreclosures, that will come in a separate surge later, because municipalities can't file papers until a homeowner is at least two years late. 

"Next year, we’re going to see a lot of foreclosures filed, and that’s when we’ll see a lot people leaving their homes," said Jordan L. Zeranti, managing attorney at the law center for the Zombies Initiative.

Kearns said he plans to ask the courts to create a special division just to deal with the anticipated flood of filings.

"This is why we have to be proactive," Kearns said. "We want to get these municipalities prepared to use the tools, to make sure they’re not caught off guard."


According to research firm ATTOM Data Solutions, which tracks foreclosures and delinquencies, Erie County had 48 zombie homes in the second quarter of this year, up 20% from a year ago. Statewide, New York had 2,052 zombie properties in the second quarter, down from 2,158 a year ago – but still the most of any state, representing a quarter of the nation's total.  

A zombie home refers to a vacant property that no one claims to own and no one is taking care of, resulting in rapid deterioration on both the inside and the outside – such as overgrown lawns and weeds, broken pipes, water or other damage and vandalism – since no one's home.

It usually happens after a homeowner defaults on their mortgage and receives a foreclosure notice, prompting them to just assume they've already lost their home, and to leave. But foreclosures take months to complete, and sometimes the lenders don't even follow through, because they no longer want the property.

So the lender never takes legal possession of the house, while the homeowner is already gone - although they are still legally liable for the property. And the home sits neglected, dragging down property values and hurting the surrounding neighborhood.

Kearns and others ideally want to help homeowners to stay, or at least to support them in working through loan modifications, forbearance or another solution. So they kicked off a "stay-in-your-home" campaign to let homeowners know of their rights to stay in their home.

It was hampered by Covid-19, but now the partners plan to get out to community centers, block clubs and other venues to spread the message of "zombie prevention through home retention."

Kearns and the law center have also met with municipal officials across the county.

But they also want the lenders who start foreclosures to take responsibility for ensuring the homes are protected and maintained.

"We’re trying to hold the banks and service providers accountable," the county clerk said. "We’re going to be very aggressive on this."

The initiative

Kearns has been waging this fight for years, as a former South District Common Council member and then a state assemblyman pushing through the Zombie Property and Foreclosure Prevention Act.

That 2016 law says that lenders, mortgage servicers and other nonbank entities must maintain vacant or abandoned properties throughout the foreclosure process – boarding up windows, locking doors, cutting the grass and preventing health hazards.

The state Department of Financial Services or individual municipalities can sue to hold a company accountable, and a judge can order fines of up to $500 per day for violations. A second piece of legislation followed in 2019 – the Zombie Property Remediation Act – that allows municipalities to compel lenders to either complete a foreclosure or discharge it so local governments can take over.

However, the identity of the loan servicer isn't easy to determine, since that's not recorded in public records. And many municipalities – especially smaller towns and villages – don't understand the law and lack the full-time resources and staff to chase down the information.

After becoming clerk, Kearns obtained $200,000 from the Erie County Legislature for his Zombies Initiative, and then teamed with the law center, which won the contract to lead the effort. The goal is to strengthen the hands of local governments by educating them about the laws and resources, while pressuring, embarrassing or even forcing lenders to take responsibility for properties if they initiate foreclosure.

Kearns and the law center take complaints from municipalities and the public about specific homes, and then research the properties and loans, contact lenders about violations of the state law and refer the most difficult cases to state regulators for investigation. Kearns also shares the information about the properties and servicers with all municipalities.

The law center attorneys will negotiate directly with the servicer or property maintenance company, issue demand letters to seek action and even file lawsuits. One lawsuit related to a Clarence house is currently pending against Nationstar Mortgage, which does business as Mr. Cooper. Zeranti said the two sides are in negotiations now.

The results

Since launching the effort two years ago, the Zombies team has researched more than 200 vacant and abandoned properties. At least half of them were considered zombie properties, and at least one in four have since been brought into compliance or have been sold.

"We have definitely seen a reduction in the length of time that properties stay vacant," Lockhart said. "Most of the servicers want to comply, just so they don’t have to deal with a lawsuit." 

Kearns and the law center have also launched the related Zombies Watch campaign, drawing public attention to individual properties in cities, towns and villages throughout the county. They've sent letters to neighbors to tell them what is happening, and posted lawn signs in front of the homes to humiliate the lenders.

And Kearns said the message is getting through.

"We’re seeing some dramatic results with our zombie foreclosure task force," Kearns said. "People that we were shaming a few years ago are now coming to the table."

Reports of vacant and abandoned homes can be made online at or via the Zombies Initiative's Facebook page.

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