Law360 reports seventy-six municipalities across New York will be receiving grants to help fight the abundance of “Zombie Properties” popping up across the state. “Zombie Properties” are abandoned homes that are not being maintained during the foreclosure process. Since the housing crisis of 2008, New York has seen an increase of these properties across the state. The number of these properties increased again in areas such as Long Beach following Hurricane Sandy when many people abandoned their homes.
The 13-million-dollar grant will be dispersed to 76 different municipalities to bolster the capacity for housing code enforcement, for tracking and monitoring the properties, and for legal enforcement to ensure banks and mortgage companies comply with state and local laws. If a municipality had more than 5,000 residents and at least 100 vacant homes, they were eligible to apply for the grants. The grants range between $52,500 and $350,000 per municipality and are derived from a $3.2 billion settlement agreement with Morgan Stanley. The settlement was based on Morgan Stanley’s acknowledgement that it had misrepresented the quality of mortgages that it packed into securities.
The non-profit of Local Initiatives Support Corp. will be overseeing the program and disbursement of the funds. Local Initiatives Support Corp. works with local development corporations around the country to provide solutions to help grow communities that are in need of assistance.
The funding comes as there is proposed legislation in the New York State Assembly attempting to limit the amount of “zombie homes” during the foreclosure process. The proposed bill will establish the “Abandoned Property Neighborhood Relief Act of 2016” which implements a duty on the mortgagee or servicing agent to maintain the property secured by a delinquent mortgage. Supporters suggest that the funds along with the proposed legislation would help improve the quality of the houses that are abandoned in foreclosure, therefore making the sale of these homes post foreclosure easier, as well as improve upon local quality of life concerns. With the decrease in “zombie housing,” more quality homes will be available for purchase.
If you are purchasing property, contact an experienced real estate attorney who can guide you through the process, and protect your legal rights. The firms experience extends to homes that are undergoing short-sales, are in the midst of foreclosure proceedings, or are bank owned. Call Georgaklis & Mallas PLLC at (718) 238-2400 or (212) 779-2400.