CAPITAL REGION, N.Y. (NEWS10) — The cities of Albany, Schenectady, and Troy have announced a financial settlement against a large mortgage lender. It’s being seen as one victory in a larger, ongoing battle against so-called zombie properties.
Spanning three counties, the settlement involves 18 vacant properties with more than 500 code violations between them. Seven of the 18 properties named in the lawsuit are located in Troy.
Troy spokesperson John Salka described what exactly zombified the properties. “A zombie property is a building that exists in what we consider to be legal limbo,” he said. That means it’s vacant after the lender began the foreclosure process, but that foreclosure has yet to be completed. “Those buildings often sit vacant for months—and in many cases years—deteriorating.”
Thanks to the settlement, Salka said his city, as well as Albany and Schenectady, were awarded a combined total of $665,000 for outstanding code violations from Ocwen Financial Corporation—and its subsidiary, PHH Mortgage—the lender of the 18 properties.
In a press release, Salka said that New York’s zombie property law “imposes a duty to inspect, secure, and maintain vacant and abandoned properties on mortgagees or their servicing agents.” The law offers municipalities the ability to legally pursue mortgage servicers for the sum of $500 per code violation for each day that the violations continue to exist.
Salka said they are hoping their efforts will motivate lenders to move forward with the foreclosure process so that zombie properties can be sold or renovated, given hope for a useful purpose. “Today’s action is just the latest step in the city’s multi-year effort to hold these financial institutions accountable,” he said.
Consider the recent demolition of another vacant building in Troy. There, the city also used the zombie law, forcing that reportedly delinquent lender to pay $60,000 in civil penalties for property negligence.
Reggie Felix lives next to a zombie property. He said he’s glad to see the city get rid of troubled properties, or to see them get renovated into livable properties. “Very glad!” he said. “All these abandoned buildings, we have got to do something with it—make Troy look a lot nicer.”
Salka said two of the homes involved in the lawsuit have recently been purchased, and one is pending. He said three others that are not in compliance and the lender are being hit with $15,000 fines for each property.
Ocwen Financial responded to NEWS10’s request for comment, saying:
“We are pleased that we were able to resolve the issues those municipalities brought to our attention. We continue to work cooperatively with them and other municipalities, including as a member of the Erie County Zombie Task Force in Western New York. We are committed to helping homeowners and the communities we serve and have a long track record of helping distressed homeowners stay in their homes, which helps to prevent zombie properties. When properties are abandoned, we work closely with our property preservation partners to maintain them in accordance with local ordinances and building codes so they do not become blights within their communities.”Dico Akseraylian
Senior Vice President, Corporate Communications