ALBANY
-- A new law in New York will require that foreclosed-on properties not be
allowed to lie vacant for long and that more protections be built into the
foreclosure process for consumers.
The
changes were approved in the last hours of the state Legislature's regular 2016
session and represent, sponsors say, the latest attempt to protect consumers
against losing their homes due to nonpayment of mortgages and to neighborhoods
and to whole communities hit by the approximately 1 million foreclosure filings
in New York state since the recession of the late 2000s.
Provisions
of the legislation (A10741/S8159) provide for:
•
Creation of a Consumer Bill of Rights to state homeowners' rights in the
foreclosure process. Specifically, the declaration must inform property owners
that they have a right to stay in their homes during the foreclosure process
until they are formally notified by a court that they must vacate the premises.
•
A mandate that the crucial notifications that lenders are required to make to
borrowers be in a language the borrower is proficient in.
•
Creation of a Community Restoration Fund within the State of New York Mortgage
Agency as a vehicle to provide for the purchase of defaulted mortgage notes, in
some instances, to revise repayment terms and to allow some homeowners to hold
onto dwellings.
•
Authorization of a new civil penalty of up to $25,000 to be imposed by courts
to punish instances where plaintiffs are not negotiating in "good
faith" in preforeclosure hearings.
•
Authorization for courts to award attorney fees and expenses to defendants
where plaintiffs are found not to be negotiating in good faith.
•
Imposition of a new preforeclosure duty on banks and lending services to
maintain vacant and abandoned properties.
•
Requirement that the entity obtaining a foreclosure move to auction within 90
days of receiving the judgment and to take actions to ensure that the property
be reoccupied within 180 days.
The
foreclosure and "zombie" property legislation was signed into law by
Gov. Andrew Cuomo on June 23.
Cuomo
and state Attorney General Eric Schneiderman praised the bill, in particular,
for its focus on so-called zombie properties, those vacant or abandoned homes
that lie dormant before, during or after foreclosure. Municipal leaders
throughout the state complain that these properties have been allowed to
deteriorate, thereby degrading nearby properties or even entire neighborhoods.
Paul
Lewis, an assistant to Chief Administrative Judge Lawrence Marks, said court
officials believe the bill could impact the courts in two ways: Through the introduction
of the new penalties for plaintiffs found to be negotiating with property
owners in bad faith and through more frequent court declarations, at the behest
of municipal officials, that properties are abandoned.
He
said court officials are studying the new statute to determine if it gives
court referees and court attorneys, the authorities who now preside over the
preforeclosure conferences the state has required in foreclosure cases since
2010, the power to impose civil penalties on bad-faith negotiators.
THE
FULL ARTICLE CAN BE FOUND HERE: http://www.newyorklawjournal.com/id=1202763416142?keywords=stashenko&publication=New+York+Law+Journal
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