From the NY Times:
On Monday, Eric T. Schneiderman, New York’s attorney general, is expected to outline legislation that he hopes will force banks to take responsibility for zombie properties, providing some help to cities like Newburgh, where officials estimate 10 percent of all homes are in some stage of abandonment.
New York State has roughly 15,000 zombie homes and leads the nation in the time required to foreclose on a home, at almost three years, according to data from RealtyTrac, a company that tracks troubled properties.
The bill Mr. Schneiderman will be asking Albany lawmakers to embrace will make lenders responsible for homes soon after they are abandoned, requiring banks to register the properties in a central database and pay for their upkeep, according to government staff members briefed on the legislation but not authorized to speak on the record.
This will not be easy, in part because banks, homeowners and city officials often disagree on what constitutes abandonment. As a result, the attorney general plans to define the term, these people say. The legislation will propose that a house can be deemed abandoned if a bank has not received a mortgage payment after an as-yet-undetermined number of weeks; other conditions, like broken windows, could also be considered.
“If a property is vacant and deteriorating, a bank has a duty to maintain it and move swiftly to resolve the foreclosure case,” Mr. Schneiderman is expected to say Monday, when he plans to detail the legislation during a speech to the New York State Conference of Mayors and Municipal Officials. His remarks were reviewed in advance by The New York Times.
If the bill passes, banks that fail to register an abandoned house will be subject to a fine, possibly $1,000 a day for each property that is not in compliance. Mr. Schneiderman’s bill also will propose that banks be forced to notify homeowners of their right to remain in a property until a judge has formally signed off on the foreclosure.
Mr. Schneiderman is also expected to propose a separate bill that would double the number of land banks in New York State to 20, from 10. Land banks are state-funded nonprofit organizations that pay to rehabilitate vacant properties.