TROY, N.Y. (NEWS10) — Albany, Schenectady and Troy have announced a joint lawsuit against one of the largest mortgage companies of zombie properties in their cities.
The lawsuit is against Ocwen Financial Corporation which have 18 vacant properties from the three cities with more than 500 code violations.
“These vacant houses are magnets for trouble and our residents know it, our residents see it and they beg us to do something about it,” said Albany Mayor Kathy Sheehan.
The properties are known as zombie properties because they’re buildings facing foreclosure where the bank or lender has not finished the process.
“It’s difficult to advance a single building in a court case, but you get the lenders’ attention when you have 16 or 18 buildings, a large number like that,” said Troy Mayor Patrick Madden.
In a statement Ocwen Financial Corporation said: “[We are disappointed the cities] did not reach out to us in advance to address the properties in question … We are carefully reviewing the lawsuits, that we have just become aware of, and will work to address any of the alleged conditions consistent with our rights and obligations.”
New York State’s Zombie Property law puts the onus of keeping up the vacant foreclosed property on the lender.
“We’re typically met with silence until case escalation which these zombie property laws enabled us to do,” said a Zombie Property Representative from Troy.
Cities can sue the lender $500 per code violation per day. That amounts to $251,000 per day against Ocwen.
“We would much rather spend that money getting properties rehabilitated and on the market,” said Mayor Sheehan.