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Posted on: July 28, 2021

Albany, Schenectady, & Troy Undertake Unified Zombie Property Enforcement Action

TROY, NY – Albany Mayor Kathy Sheehan, Troy Mayor Patrick Madden, and Schenectady Mayor Gary McCarthy today announced that Albany, Schenectady, and Troy have joined forces to coordinate their filings of lawsuits against Ocwen Financial Corporation and its subsidiary, PHH Mortgage.

Utilizing New York State’s Zombie Law, the three cities today filed a total of 18 lawsuits, covering 18 properties with 502 NYS building code violations. With this coordinated action, all three Cities are sending a strong message to mortgage servicers across the State that they must properly maintain properties upon which they are foreclosing, and bring foreclosure actions to a timely completion. Ocwen Financial Corporation and PHH Mortgage are among the Capital Region’s largest mortgage servicers of Zombie properties.

A Zombie Property is a vacant property facing mortgage foreclosure where the bank or lender has not yet finished the foreclosure action. These properties are left in legal limbo, with the owner led to believe by the financial institution that the owner has lost the property and the financial institution refusing to undertake responsibility for maintaining it. Zombie properties will fall into disrepair, forcing municipalities like Albany, Schenectady, and Troy to undertake expensive remediation and enforcement efforts to address the disrepair.

New York State’s Zombie Property Law imposes a duty to inspect, secure and maintain vacant and abandoned properties on mortgagees or their servicing agents. The Zombie Law also gives municipalities the ability to sue mortgage servicers for $500 per code violation per day the code violation exists. Under this coordinated effort, the lawsuits brought forth by Albany, Schenectady, & Troy could award upwards of $251,000 per day the violations remain to the three cities combined. Today’s filings are an unprecedented action by Capital Region municipalities in enforcing the New York State Zombie Law.

Mayor Sheehan said, “My administration has worked tirelessly in the fight against blight and this is yet another example of our commitment to revitalizing our communities. We are thrilled to have worked hand-in-hand with our partners in Schenectady & Troy to continue this transformative work. Thank you to New York State Attorney General Letitia James, who provided us with the necessary resources in the Zombies 2.0 program and the Cities RISE grant to pursue such an unprecedented action, and our Cities RISE team for their commitment to reducing the number of zombie properties in the City of Albany.”

Mayor Madden said, “Zombie properties negatively affect the quality of life and property values in our neighborhoods. While enforcement is time and resource intensive, Troy’s Zombie prosecution efforts have successfully forced demolitions, property sales, code compliance, and significant financial settlements. This unified initiative will improve the processes and property maintenance actions of Financial Institutions, and we are pleased to work with leaders in Albany and Schenectady on this important enforcement initiative.”

Mayor McCarthy said, “Vacant and distressed properties continue to harm quality of life and property values in our neighborhoods, and we must use every tool at our disposal to hold negligent financial institutions accountable. We have made great strides dealing with vacant properties across the city and we’ll continue to use the resources available to enforce the regulations and strengthen our communities. This enforcement action puts mortgage servicers and banks on notice that if vacant properties aren’t maintained they will be held accountable. I am proud to stand with my fellow mayors against this organization that perpetuates harm not just in Schenectady but across the Capital Region.”

Today’s enforcement actions are funded by New York State Attorney General Letitia James’ Office, through the Local Initiatives Support Corporation (LISC) as part of the Zombie and Vacant Properties Remediation and Prevention Initiative, and through Enterprise Community Partners, as a part of the Cities for Responsible Investment and Strategic Enforcement (Cities RISE) program.

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Press Contacts:

David Galin, Chief of Staff, City of Albany  (518) 434-5105

John Salka, Communications Director, City of Troy  (518) 279-7131

Alex Sutherland, Director of Operations, City of Schenectady (518) 382-5000

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