New Law Will Require Banks to Maintain Abandoned Homes in N.Y. State

Sadly, the foreclosure crisis hasn't improved in the state of New York. NY State Attorney General Eric Schneiderman estimates there are more than 16,000 abandoned properties statewide.

One report finds that these zombie properties have decreased the property value by $2.2 million dollars across Dutchess, Putnam, and Wetchester Counties alone

Now, mortgage lenders will face stiffer penalties if they fail to maintain abandoned homes before foreclosure. This includes a lot of safety issues like broken pipes and windows, as well as taking care of utilities.

The banks could see civil penalties up to $500 a day for letting these zombie homes deteriorate.

The Times Herald reports that Governor Andrew Cuomo signed the last-minute bill into law Thursday. An electronic registry will also be set up listing all the abandoned homes in the state.

Under the old law, the banks only had to maintain the properties after the foreclosure judgments.

The Mortgage Bankers Association of New York opposed the new law, saying the bill would require lenders to maintain properties once they are vacant even if the lender doesn't own the property, and that the foreclosure process could take years.

Assemblyman Bill Nojay of Monroe County also opposed the bill, saying it will only cause the cost of mortgages to increase.