Governor Signs Foreclosure Prevention and “Zombie” Property Legislation

June 23, 2016, NEW YORK—Legal Services NYC applauds the New York State Legislature and Governor Cuomo for passing and signing comprehensive legislation that will prevent foreclosures, establish a Community Restoration Fund, and curb the threat posed to communities by “zombie properties,” vacant and abandoned homes that have been foreclosed upon by a bank and that subject entire neighborhoods to blight and neglect.

The legislation improves the effectiveness of foreclosure settlement conferences in various ways, including by specifying permissible remedies for findings of failure to negotiate in good faith; extends the time for homeowners to answer; and establishes a Consumer Bill of Rights to help educate people about how to prevent foreclosure. In addition, the legislation creates a Community Restoration Fund that will allow the State of New York Mortgage Agency to purchase defaulted mortgage notes and offer partial loan forgiveness to help New Yorkers afford and keep their homes.

Finally, the legislation imposes a pre-foreclosure duty on banks to maintain vacant and abandoned properties, and will subject them to daily fines if they fail to do so. The state will create an electronic registry of abandoned properties and expedite foreclosure processes in order to get those properties back on the market as quickly as possible.

LSNYC is gratified that New York State has taken these major steps toward protecting homeowners and revitalizing and strengthening New York communities.

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