SCHENECTADY — The cities of Albany, Troy and Schenectady on Tuesday announced a settlement agreement in a series of lawsuits filed jointly by the three municipalities last year against a New Jersey-based mortgage provider for failing to maintain more than a dozen foreclosed properties.
Ocwen Financial Corp. will payout a combined $665,000 to the three municipalities and could be liable for an additional $200,000 if the hundreds of code violations facing the properties are not resolved under the terms of the agreement.
Schenectady Mayor Gary McCarthy said the city is expected to receive around $200,000 from the settlement, which he hopes will deliver a powerful message to those who fail to maintain property within the city moving forward.
“We just want people to maintain their property and have a little bit of pride in it,” he said. “It’s unfortunate when you have to go through these formal legal proceedings to get what are large banks and financial institutions who have the ability and the wherewithal to be good corporate citizens and they haven’t.”
The three municipalities filed 18 lawsuits pertaining to 18 different properties against Ocwen Financial Corp. and its subsidiary, PHH Mortgage, under the state’s Zombie Property Law last July. The 2019 law requires mortgage providers to inspect, secure and maintain vacant and abandoned properties and allows municipalities to sue the providers for $500 per code violation for each day the violation exists.
The 18 properties had amassed a combined 502 violations, which made the cities eligible to collect $251,000 per day under the law.
A zombie property is a vacant property facing mortgage foreclosure but is not maintained as the bank works to finalize foreclosure proceedings, which could take months.
In Schenectady, seven properties were at the center of the settlement: 901 Bridge St., which accumulated 35 code violations; 1223 Sixth Ave., with 20 violations; 1146 Van Velsen St., with 22 violations; 910 Francis Ave., with 2 violations; 17 Parker Road, with 12 violations; 1087 Davis Terrace, with 10 violations; 2305 Fairlee St., which accumulated seven violations.
McCarthy said there is no “cookie cutter model” when it comes to addressing vacant properties, but noted that the city markets tax-foreclosed properties through its HOMES program in order to get the properties back on the tax rolls. The program is designed to increase homeownership within the city by recycling tax-foreclosed homes that are vacant but salvageable.
But when it comes to addressing blighted bank-owned properties, McCarthy said it’s important to treat banks like any other home owner, noting that dilapidated properties have no value for banks.
“They have to be treated the same as any homeowner,” he said. “We want them to maintain it to create some value, not only for themselves, but for the adjacent properties in the neighborhoods, so we’ve gone after them.”
Ocwen Financial Corp., in a statement, said it was pleased to have resolved the issues the municipalities “brought to our attention,” and touted its “long track record of helping distressed homeowners stay in their homes.”
“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,” the bank said in a statement. “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.”
Contact reporter Chad Arnold at: 518-410-5117 or [email protected]. Follow him on Twitter: @ChadGArnold.
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