It ain’t fair

Posted in Economics, Politics, Property Taxes, Unrest | 70 Comments

I don’t know who Lawrence Uniglicht is, but he nailed it this morning. Posted in full, from the Daily Record’s Letters section:

Feds owe New Jersey more than they’re paying

Why is New Jersey jumping through hoops to balance its budget as required by law? Why is our governor attempting to break a contractual obligation to contribute sufficient funds to public employee pensions, an unconstitutional act per a state judge? Why do New Jersey homeowners pay much higher real estate taxes than homeowners in most other states?

We should note New Jersey sends way more tax payments to Washington than it receives in reciprocal government spending from our nation’s capital. Our taxpayers in effect subsidize a host of other states, many in the South, that receive more from Washington than they pay out.

For example, New Jersey receives 61 cents per dollar sent, while Mississippi receives $2.02, Louisiana receives $1.78, Alabama receives $1.66, Arkansas receives $1.41, and South Carolina receives $1.35.

Indeed, many states subsidized by short changed states like New Jersey attract residents by offering real estate at relatively low prices taxed at a much lower rate than our fair state. Could it be New Jersey residents are getting the shaft while those other states are getting the gold mine?

Maybe that is why we have difficulty balancing our state budget, can’t meet our pension obligations. Maybe Washington ought to throw us a well-deserved bone, send back enough money to pay our current obligations. Through the years, we have been fleeced by much of the rest of the country for literally hundreds of billions of dollars in lost revenue.

Frankly, I’m tired of subsidizing all those anti-Washington southern Republican-leaning states, continually biting the hand that feeds them with harsh rhetoric, still fighting “The War of Northern Aggression” while indirectly taking New Jersey’s money.

Our two Democratic senators ought to sponsor federal legislation to grant proportional rebates to highly taxed states suffering a net loss in revenue to our nation’s capital. New Jersey, for one, getting an anemic bang for its buck, losing almost 40 cents per federal tax dollar, would likely secure enough revenue to balance its budget, pay its public pension obligations, and send enough money to municipalities to substantially reduce real estate taxes.

New Jersey taxpayers paid about $90 billion in federal taxes last year. Our net loss to Washington was therefore about $36 billion. A 50 percent rebate of $18 billion would cover a $2.25 billion pension payment that is due; help balance the state’s budget, leaving $15.75 billion to be disbursed among the state’s municipalities earmarked to reduce real estate taxes.

It’s only fair.

Lawrence Uniglicht

Housing recovery for the top?

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 87 Comments

From Bloomberg View:

Income Inequality Hits the Housing Market

There’s been plenty of talk recently about signs of recovery in the housing market. Rather than think about housing as a single market, it might be helpful to look at housing as many markets based on everything from geography to price to new versus existing.

What I find intriguing is how things are shaping up based on price. It’s pretty clear that the fastest growth in new housing is at the high end, where sales are increasing the most. This might be a sign of economic recovery, but more likely it suggests that those in higher income brackets are doing better than average.

One of the features of today’s mortgage market is that, in spite of low rates, credit can be hard to obtain because of tough underwriting standards. That doesn’t affect high-end buyers as much as others because they tend to rely less on financing and have more cash as a result of gains from their financial-market investments.

According to the U.S. Census, the biggest gain in sales of new homes last year was for properties costing $500,000 and up, with a 17.3 percent increase, while sales of the least expensive houses tumbled 11.4 percent.

Perhaps this is like some law of physics in which what goes down a lot must have an opposite reaction. True, back in the dark days of the financial crisis in 2008, sales of houses in all price categories plunged. The high end was hurt much harder, though, perhaps because the crash in financial markets inflicted so much pain on the investments of the well-off.

What remains to be seen is whether sales of more expensive houses will continue outpacing the broader market. It seems as though all builders are trying to cash in on the same part of the market at the same time. This is keeping new lower-priced housing in short supply. We can only hope that better economic conditions will boost employment, raise incomes and ease credit conditions so that more moderate-priced housing is built and bought.

It’s a privilege to pay NJ taxes

Posted in New Jersey Real Estate, Property Taxes, Unrest | 90 Comments

From the Record:

Bergen’s property taxes among nation’s highest

Bergen County homeowners had the fifth-highest average property tax bill in the nation, at $11,159, last year, according to a new survey by RealtyTrac, a California real estate information company. Passaic County’s single-family tax bill averaged $8,904, according to RealtyTrac.

The survey also confirms what Garden State homeowners have found out the hard way: New Jersey’s property taxes are among the highest in the nation, averaging more than 2 percent of a single-family home’s value each year. Passaic actually had a higher tax rate (2.98 percent) than Bergen (2.07 percent), apparently reflecting Passaic County’s lower property values.

Nationally, property tax rates average 1.3 percent of the property value, according to RealtyTrac.

“New Jersey has been in this unenviable position for a long time,” said Joseph Seneca, a Rutgers economist. “Property taxes are driven primarily by the costs of local government and public education, and the steady rise over the years in these costs.” In addition, local governments in New Jersey rely almost exclusively on property taxes, while in other states, local governments are funded in part by sales and income taxes, according to Henry Coleman, a Rutgers professor who studies public finance.

“New Jersey is a rich state, and rich states enjoy lots of high-quality public services, starting with education,” Coleman said.

The rate of growth in New Jersey property taxes has slowed since 2010, when a state law limited increases to 2 percent a year. In 2014, the average property tax bill in New Jersey actually grew by 2.16 percent, in part because of increased municipal spending to deal with last winter’s storms. Local governments are allowed to exceed the cap in certain cases, including response to disasters.

By contrast, the rate of growth from 2004 to 2005 was over 7 percent.

Say it ain’t so!

Posted in National Real Estate | 51 Comments

From Quartz:

Why you shouldn’t buy the worst house in the best neighborhood

Some proverbs offer sage counsel. A bird in the hand is worth two in the bush. Cleanliness is next to godliness. Even a broken watch is right twice a day. Luck is what happens when preparation meets opportunity. These are wise words to live by. But one saying that needs to have its proverbial status revoked is the well-known real estate adage, “Buy the worst house in the best neighborhood.”

Proponents of this strategy contend that buying a bad house in a good neighborhood is a surefire investment. The higher value of the surrounding homes, the argument goes, will elevate even the worst home’s value. A great neighborhood is like a rising tide: It will lift the price of all the houses in it.

This advice has been offered, exaggerated, and accepted for decades.

As far back as the late 1970s, newspapers have profiled investors who cite their worst-house-in-the-best-neighborhood strategy as the guiding principle of the real estate game. In 1987, a Chicago Tribune article, entitled “Buy the Worst House on the Street,” asked readers, “Would you spend $1 to make $2?”

Even British artist David Hockney shared his opinion on the matter: “Always live in the ugliest house on the street—then you don’t have to look at it.”

But are they right? Is buying the worst house in the best neighborhood a wise investment or is this strategy a real estate myth?

If the adage were true, the bottom 10% of houses would need to perform better than the more expensive homes in their neighborhood. Faster appreciation would indicate that buying the cheapest house in the best neighborhood is a strategy that really does pays off.

But—alas—it doesn’t.

Instead, we found that only rarely does the bottom 10% outperform the top 90% of houses in a ZIP code. On average, these bottom-tier homes do neither better nor worse than the others.

Looking at those numbers, we might have concluded that buying a neighborhood’s worst home is therefore a neutral investment strategy—a myth, but not a harmful one. It doesn’t maximize returns. But it doesn’t cost buyers either.

Then, however, we dug a little deeper—and we saw that buying the worst house in the best neighborhood can actually backfire. That’s because the more affluent a neighborhood is, relative to its greater metropolitan area, the worse the homes in its bottom 10% tend to perform.

In short, the nicer the neighborhood, the bigger the myth!

Will the snow hold down sales?

Posted in Housing Recovery, New Jersey Real Estate | 59 Comments

From the Record:

Winter weather puts a chill on home sales

Avi and Leah Greengart want to sell their four-bedroom Teaneck house, but this winter’s frigid, icy weather hasn’t done them any favors.

“There has not been a warm day since we put it on the market” in early February, says Avi, a technical analyst. “Our thought process was that at this time in the market, there won’t be much competition from other houses.”

But as he’s found himself frantically shoveling snow before open houses, he occasionally wonders: “Why didn’t we just wait?”

There’s a reason home sales tend to ramp up in the spring. Buying and selling in the winter can be a challenge — especially with the kind of winters we’ve seen the past two years. Average temperatures through most of February ran more than 10 degrees below normal in North Jersey.

Icy walkways, single-digit temperatures and snow-covered decks and yards can lead sellers to hold off on listing their properties and cause buyers to spend Sunday on the couch instead of touring homes.

“The cold, snowy, icy weather doesn’t make for a pleasant showing experience,” said George Rosko, an agent with Coccia Realty in Lyndhurst. “There is no place to park when you get to the house, and you can’t see what the front or rear yards really look like because they are snow-covered.”

The challenges start even before a buyer comes in the front door. Many sellers are otherwise ready to list their homes but don’t want to worry about clearing ice and snow off the driveway and front walks to make way for buyers.

“It’s difficult enough to keep dishes out of the sink and beds made in case of a showing, but the added outdoor cleanup is too much,” said Janine Fraser of Coldwell Banker in Saddle River. “Homeowners are also concerned about the liability if someone slips and falls on ice.”

“I have three clients who are waiting for this weather to subside before they list their homes, and I agree with their decision,” said Kate Conover, a Re/Max agent in Saddle River. “Buying a home is an emotional purchase, so making the process as pleasant as possible is important. If you’re slipping and sliding up the walkway, and skidding across the tiled foyer, it just changes your reaction to the home.”

“Some people are going to wait [to list their homes] until the snow has melted,” said John Pordon of Century 21 in Totowa. “You try to tell people to list the house now, because with the inventory low, you put yourself at an advantage. But a lot of sellers don’t want people tracking salt and snow through the house.”

“There are a lot of unknowns for the buyer,” said Gary Silberstein of Keller Williams Valley Realty in Woodcliff Lake. “I just did a home inspection in Mahwah last week, and the home inspector was only able to inspect what he was able to visually see. The deck, foundation, walkways, and part of the roof were covered with snow. The attorney put a clause in the contract that the buyer can go back and re-inspect after the snow melts.”

The Other New Jersey

Posted in Demographics, Economics, Employment, Housing Recovery, South Jersey Real Estate | 42 Comments

From the Press of Atlantic City:

Still dropping: Home prices struggle to recover from recession

Robert Szostak is worried about how cheaply he must price his four-bedroom home in Middle Township before it sells.

A few prospective buyers toured the home — with its big yard and year-round sunroom nestled in Pine Forest Court — during its six months on the market, but there were no offers.

The asking price was cut by $30,000 to $289,900, and the 60-year-old Cape May Court House resident may reduce it more as he looks to retire and move out of state.

“I don’t think I’ll sell this unless I put it down to $225,000. … People can’t afford anything,” he said.

What’s happening with Szostak’s home is an example of home-price trends in South Jersey, particularly in year-round areas not greatly influenced by vacation homes.

An analysis of state data by The Press of Atlantic City shows nearly half of the municipalities in the region saw home sale prices drop in 2014 from the year before.

And in five years, only about a dozen towns with significant sales volumes in Atlantic, Cape May, Cumberland and southern Ocean counties saw a rise in average home sale prices, according to the analysis of New Jersey Division of Taxation data.

These factors are playing out as Szostak tries to sell his home in Middle Township, where the average sale price rose 2 percent in the past year but is still 21 percent lower than in 2009 — a difference of nearly $76,000.

“Middle-class homes are gone. Anything that’s about $200,000 to $300,000, nobody wants anymore,” Szostak said. “It seems to be they want anything under $200,000 or the half-a-million dollar properties.”

In Atlantic City and elsewhere in the county, the weight of steep property-tax increases, foreclosures and job losses tied to casino closings last year are weighing on prices, said Charlie Miltenberger, owner of Jersey Atlantic Realty in Atlantic City.

Short sales — which sell for less than the property’s mortgage — further dampen the market, he said.

“There was a lot of short-sale activity from 2008 onward, but it snowballed after the taxes went up in Atlantic City and the casino layoffs,” Miltenberger said. “They have to become very realistic, and they have to go by comparable sales, which reflect a depressed marketplace. … There are investors and home buyers out there, but they’re looking for bargains and realistically priced properties. It seems anything under $150,000 is moving. Once you increase the price, it slows down.”

The average price in Atlantic City dropped 12 percent last year from 2013; in Egg Harbor City, it fell 25 percent in a year, state figures show.

January pending sales hit 18 month high

Posted in Housing Recovery, National Real Estate | 35 Comments

From the WSJ:

Pending Home Sales Rose 1.7% in January

A forward-looking gauge of U.S. home purchases rose in January to its highest level in nearly a year and a half, a sign of firming demand in the housing market.

The National Association of Realtors said Friday that its pending home sales index, which is based on contract signings for purchases of existing homes, increased 1.7% to a seasonally adjusted level of 104.2 in January from an upwardly revised reading of 102.5 in December.

Economists surveyed by The Wall Street Journal had expected pending home sales would rise 2% last month after dipping in December. Home sales typically close within a couple months after signing.

“Through the volatility, the trend in home sales is up probably up modestly at least,” High Frequency Economics chief U.S. economist Jim O’Sullivan said in a note to clients.

The index rose 8.4% in January from a year earlier and reached its highest level since August 2013, when home sales were tumbling after a jump in mortgage rates.

According to Friday’s report, pending sales of existing homes rose 3.2% in the South last month from December, and climbed 2.2% in the West. Pending sales ticked up 0.1% in the Northeast and fell 0.7% in the Midwest.

The Boring Plateau

Posted in Housing Recovery, National Real Estate | 166 Comments

From HousingWire:

Latest data shows housing economy sluggish

Sales of new single-family houses in January 2015 were at a seasonally adjusted annual rate of 481,000, down 0.2% from December’s big gains.

This is 0.2% below the revised December rate of 482,000, but is 5.3% above the January 2014 estimate of 457,000, considered a weak level.

Lindsey Piegza, chief economist at Sterne Agee, says she thinks this shows a housing market that’s flat.

“Coupled with a near 5% decline in existing sales, this morning’s decline in new sales suggests the housing recovery remains muted. Yesterday’s monetary policy testimony revealed a dovish Federal Reserve Chairman,” Piegza said. “Of course, given the slew of disappointing economic news including back-to-back months of negative retail sales, a one-year low on the ISM, and four months of negative durable orders in the last five, not to mention increasing concerns regarding a further decline in inflation and a still-sluggish housing market, and it’s hard to imagine why the Fed wouldn’t sound dovish in their assessment of the economy, as well as hesitant in their ability and willingness to initiate liftoff.

“This morning’s home sales report further confirms the Fed’s assessment of a ‘slow’ recovery in the US housing market and offers yet another reason for an extended timeline for liftoff,” she said.

Rick Sharga, executive vice president at Auction.com, told HousingWire he sees housing entering a “boring plateau.”

“That’s not a bad thing considering how bad the recession was — there’s a reason it was called the Great Recession,” Sharga said. “We’re entering a period of boring but slow, steady growth.”

December Case Shiller

Posted in Demographics, Employment, Housing Recovery, National Real Estate | 105 Comments

From the WSJ:

Growth in U.S. Home Prices Slowed in 2014

Home prices in 2014 saw yearly growth slow to the weakest pace in three years, according to a home price report released Tuesday.

The home price index covering the entire nation rose 4.6% in the 12 months ended in December, said the S&P/Case-Shiller Home Price Index report. That is down slightly from 4.7% in November and is the weakest full-year gain since home prices were falling in 2011.

Narrower measures of home prices also showed a small acceleration in December but full-year growth still was the lowest since 2011.

The home price index covering 10 major U.S. cities increased 4.3% in the year ended in December from a 4.2% rise in November. The 20-city price index was up 4.5%. That is above the 4.3% advance posted in November and equal to the 4.5% expected by economists surveyed by The Wall Street Journal.

The report said average home prices in the 10 and 20 cities covered are back to levels last seen in autumn 2004, but are still down between 16% and 17% from their peaks set in mid-2006.

“The housing recovery is faltering. While prices and sales of existing homes are close to normal, construction and new home sales remain weak,” said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. “The softness in housing is despite favorable conditions elsewhere in the economy: strong job growth, a declining unemployment rate, continued low interest rates and positive consumer confidence.”

Regionally, San Francisco and Miami saw the strongest 12-month increases while Chicago saw an average home price increase of just 1.3%.

Not the way to start the year

Posted in Economics, Employment, Housing Recovery | 81 Comments

From the WSJ:

U.S. Home Sales Falter to Start Year

Sales of previously owned homes slowed in January, a reflection of the rising prices and tight supplies that could constrain the housing market this year.

Existing-home sales fell 4.9% last month from December to a seasonally adjusted annual rate of 4.82 million, the National Association of Realtors said on Monday, the slowest pace in nine months.

Weather didn’t appear to be a big factor in the report, which showed sales falling across all regions of the country. While New England was buffeted by blizzard conditions, January overall was warm and dry in the contiguous U.S., according to the National Oceanic and Atmospheric Administration.

The median sale price for a previously owned home, meanwhile, rose 6.2% from a year earlier to $199,600. Year over year, prices have climbed for 35 straight months.

“One of the big problems is the supply of homes,” Joel Naroff, chief economist at Naroff Economic Advisors, said in a note to clients. “Basically, buyers have limited options as the inventory is hovering near some of the lowest levels we have seen in the last fifteen years.”

At the current sales pace, it would take around 4.7 months to exhaust the supply of homes on the market, the NAR said.

Construction of more homes could help ease the situation, but home building also has remained subdued.

Housing has been a missing piece of the recovery, making only a small contribution to overall economic growth last year. Many economists expect sales to accelerate this year amid steady hiring, still-low interest rates and the formation of new households, though the year is off to a bumpy start.

What subprime crisis?

Posted in Mortgages, National Real Estate, Risky Lending | 99 Comments

From the WSJ:

Lenders Step Up Financing to Subprime Borrowers

Loans to consumers with low credit scores have reached the highest level since the start of the financial crisis, driven by a boom in car lending and a new crop of companies extending credit.

Almost four of every 10 loans for autos, credit cards and personal borrowing in the U.S. went to subprime customers during the first 11 months of 2014, according to data compiled for The Wall Street Journal by credit-reporting firm Equifax.

That amounted to more than 50 million consumer loans and cards totaling more than $189 billion, the highest levels since 2007, when subprime loans represented 41% of consumer lending outside of home mortgages. Equifax defines subprime borrowers as those with a credit score below 640 on a scale that tops out at 850.

Lenders’ interest in customers who were the hardest hit by the financial crisis reflects both the relative health of the U.S. economy and firms’ desires to take more risks at a time when ultralow interest rates are depressing profits.

It also shows Americans are willing to take on more debt, which was reinforced by a Federal Reserve Bank of New York report released Tuesday that showed total household debt increased $306 billion, or 2.7%, in the fourth quarter of 2014 from the year-ago period, to the highest level since the third quarter of 2010.

The push into subprime loans could have broad implications for the U.S. economy. Easy financing has already helped fuel U.S. auto sales, which totaled 16.5 million cars and trucks last year, an increase of 5.9% from 2013 and up 59% from 2009, according to automotive website Edmunds.com.

Some observers said the availability of subprime credit is a positive for borrowers and the economy. “This is helping people on a real level, helping them move forward,” said Dennis Carlson, deputy chief economist at Equifax.

Others are more concerned. “It’s good while the party lasts, but it’s exposing exactly the kinds of people to a negative economic shock that you don’t want to expose,” said Amir Sufi, a University of Chicago finance professor. Subprime borrowers, who pay much higher interest rates on loans than customers with good credit scores, are more prone to missing payments in periods of economic distress, said Mr. Sufi.

Fake it until you take it

Posted in NYC, National Real Estate, Unrest | 6 Comments

From Bloomberg:

How to Hang Out in a House Until It’s Yours

The cult of adverse possession is alive and well in New York City.

Adverse possession is the centuries-old legal principal that says, basically, if a squatter occupies a piece of land long enough, he owns it. This week, a Howard Beach man named Peter Zephyrin has been telling local news outlets that he’s using adverse possession to take ownership of a boarded-up apartment complex in Queens — and that he’s charging tenants $250 a week to take up residence there. Zephyrin says he has been arrested three times for trespassing on the property, according to the local Fox television affiliate.

His tenants appear to enjoy greater rights. Earlier this month, a housing court ordered the property management company responsible for the complex to replace a door it had removed from one of the occupied buildings.

So what we have is a legal tangle wrapped in a fallacy wrapped in a tragedy. The tragic part is that New York’s housing market is so tight residents will pay $250 a week for an apartment without gas, a refrigerator, or a working stove. The tangle is that unlike Zephryin, his tenants appear to be protected from immediate eviction, perhaps by virtue of paying rent.
And now, the fallacy.

The apartments are in foreclosure, according to court records, and have been vacant for years, according to Fox. Zephyrin, who has been arrested for squatting before, took up residence and, according to the New York Post, installed electricity and water heaters and started charging rent.
“Imagine you woke up one day and found out the U.S. government gave you license to use your brain and do something unorthodox,” Zephyrin told the Post. “I’m taking what the lazy wealthy person left behind.”

In New York State, where it takes 10 years to win adverse possession, the notable cases have involved things like shuffleboard courts and chicken coops. The famous squatters in Manhattan’s East Village won ownership of their building through negotiations with the city, which owned the buildings, not by adverse possession.

Yet interest in adverse possession and squatters’ rights remains strong, in some quarters. It picked up after the foreclosure crisis emptied houses, lending the idea of the little guy claiming a piece of land a kind of frontier romance.

Shocking Housing Data (Who is the new guy?)

Posted in Employment, Housing Recovery, National Real Estate | 90 Comments

From HousingWire:

Realtor.com: Tightening inventories likely to push home prices up

Housing inventory continues to tighten in markets across the country – a 2015 trend identified by realtor.com Chief Economist Jonathan Smoke in its housing inventory data report for January.

Nationwide total listings declined by 6.7% month over month and about 8.7% year over year.

“January’s inventory data suggest a continuation of the tightening trend we identified last month in the December data, and with a shortage of inventory typically comes increased home prices,” Smoke said. “Half of the 200 markets realtor.com tracks experienced year-over-year price increases of at least 6% in January.”

Despite a shortage of inventory nationally, data on the 200 largest markets found a handful of housing markets categorized as healthy and growing.

These markets include: New York-Newark-Jersey City, NY-NJ-PA,;Tampa-St. Petersburg-Clearwater, Florida; Jacksonville, Florida, and Pittsburg, Pennsylvania.

“These four markets are bucking the trend, showing notable increases year over year in total listing counts and median list prices as well as clear declines in median inventory age,” Smoke said. “We will likely see the most sales growth in these markets in the coming months.”

You can fix this fixer-upper up with a little bit of love!

Posted in Housing Recovery, National Real Estate, New Development | 97 Comments

From the WSJ (hat tip Chi):

Fixer Uppers: A Pot of Gold or a Money Pit?

Fixer-uppers are an increasingly popular option for home buyers looking to save a little money in exchange for a bit of elbow grease, says Leslie Piper, a real estate agent with San Francisco Bay Area real-estate firm Pacific Union.

But where are the best spots for buying such properties? Based on the percentage, as of December 2014, of home listings that included repair-related terms like “fixer,” “as-is” and “TLC,” the Realtor.com analysis identified both the markets with the most fixer-uppers available and the places where buying one offers the biggest potential price break.

In addition to Clarksville, towns like Omaha, Neb. (53%), Albany, N.Y. (50%) and Greensboro, N.C. (49%), offer significant savings, but, again, supplies are limited—these towns’ stocks of fixer-uppers number 10, 23 and 1, respectively.

On the other hand, buyers will likely find happier hunting, but smaller discounts, in spots like Atlanta (288 listings, 37% discount), Tampa, Fla. (223 listings, 32% discount) and Philadelphia (348 listings, 17% discount).

And then there are locales where buying a house in need of TLC will scarcely score any savings at all. In Portland, Ore. the median fixer-upper runs $354,928, just 6% lower than the $379,000 median price of a home in good condition. In Prescott, Ariz., the discount is a mere 2%. Lorinda Johnson, an associate broker at Prescott Realty, attributes this small spread to what she says is the town’s stable, retiree-heavy homeowner base.

Regardless of where they settle, buyers considering a fixer-upper should make sure to get estimates from qualified tradespeople to determine just how much they’ll have to sink into the property to bring it up to snuff, says Ms. Piper.

Some repairs, she notes, might be more trouble than expected. Issues like a bad roof or dry rot, for instance, “can be more costly than a buyer might recognize” she says, while problems like open subfloors and exposed wiring represent safety hazards that could make it difficult to get a mortgage.

They are zombies because nobody wants them

Posted in Foreclosures, Politics, Unrest | 106 Comments

From Housingwire:

New York doubling down in fight against zombie foreclosures

The State of New York doubling down in its efforts to fight back against the rising tide of zombie properties, which are homes that are vacant or abandoned during the foreclosure process.

New York Attorney General Eric Schneiderman announced on Monday that he plans to resubmit an expanded version of a bill he first introduced in 2014 to the state legislature. Schneiderman’s bill, called the Abandoned Property Neighborhood Relief Act, is designed to reduce the number of zombie homes by informing homeowners of their right to stay in their home until a court orders them to leave.

According to Schneiderman’s office, the bill will also require mortgage lenders and servicers to identify, secure and maintain vacant and abandoned properties shortly after they are abandoned. Under current state law, lenders and servicers aren’t required to secure and maintain vacant properties until the end of the foreclosure process.

The bill would also create a statewide registry of zombie properties, designed to help local governments with the enforcement of property maintenance laws.

Additionally, if Schneiderman’s bill becomes law, any fines levied against banks, lenders or servicers for violations of the state’s abandoned property laws would be directed into a fund, which would be used by local governments to hire additional code enforcement officers.

“Leaving zombie properties to rot is unfair to municipalities and unfair to neighbors, who pay their taxes and maintain their homes. In the next two weeks, my office will resubmit to the Legislature our bill that would require banks to take responsibility for maintaining properties much earlier in the foreclosure process, take that burden off of towns and cities, and allow local governments to more easily identify the mortgagees of these properties to make sure they maintain them,” Schneiderman said.

“And as my office enforces the requirement that banks take responsibility for these properties, any fines we levy will go into a fund to help towns and cities hire more code enforcement officers.”

Schneiderman cited the drastic increase of zombie properties in New York in 2014 as one of the main reasons for putting the legislature forward now.