New York State Assemblyman James Skoufis announced on April 13 a campaign to encourage financial institutions to promptly finish foreclosures on vacant properties. His “bank shaming” initiative draws attention to so-called zombie properties that lower the value of neighboring properties.
“No one wants to live next door to an empty home,” Skoufis said. “But in many neighborhoods, sluggish foreclosure proceedings are causing long-term damage by allowing abandoned houses to fall into disrepair.”
A homeowner who just leaves and stops making payments on the home mortgage causes problems for the lender. Banks will often assign these bad debts to other banks. Skoufis said in a press statement the foreclosure process is doubled.
“It would be better if no one had to face foreclosure,” said Veronica Raphael, director of foreclosure prevention for the Empire Justice Center, “but when default does happen, it’s critical that people understand their rights and that banks behave responsibly.”
Not only is it difficult to find new buyers, the community can’t contact the actual owner about problems. When homes sit vacant for long periods, vermin, overgrown greenery, and even squatters or vagrants can lower property values.
Neighbors feel the effects of a neglected property. “A single home in foreclosure can cost its neighbors 1.4 percent in home value,” according to Skoufis. “By refusing to take responsibility for keeping up these empty homes, these big banks are dragging down property values and inviting crime into neighborhoods.”
Skoufis recommends that mortgage lenders allow people to remain in the home during foreclosure, which cuts down on the problems caused by vacancies.
Faith Moore, executive director of the Rural Development Advisory Corporation, supports continued occupancy during foreclosure.
“Making sure people who fall behind on housing payments know they can stay in their homes is beneficial not just for the individuals, but for their neighborhoods, as well,” Moore said.
The lawmaker has co-sponsored a bill to require banks to provide the contacts responsible for maintaining a property that has stalled in foreclosure.
The campaign will place a “bank shaming” sign on a property in delayed foreclosure. Skoufis launched the campaign this week at 38 Ann Elizabeth Drive in Washingtonville, a home that has been stuck in the foreclosure process for nearly three years due to Wells Fargo’s inaction.
“All we ask is that banks make a good faith effort to finish what they started by completing their foreclosures,” said George Green, supervisor for the Town of New Windsor.
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