LACKAWANNA, N.Y. (WIVB) – An abandoned and dilapidated apartment house in Lackawanna that became the focus of a new state law, cracking down on foreclosed “zombie” property may be getting a new life.
Local officials announced on February 3, enforcement of the new law, called the Foreclosure Relief Act, could lead to $500 a day fines against the mortgage holder unless the property was cleaned up. The company, Ditech Financial has given up its claim to the property on Warsaw Street, and it has been sold.
Assemblyman Michael Kearns, who guided the measure through the state legislature and on to Gov. Andrew Cuomo’s desk, said Lackawanna is one of the first local governments to claim success under the new law, and criticized Ditech for turning down previous offers for the property.
“There was an offer on this property. It was listed on 10/2/2015—the offer of $35,000. It was rejected.” Now Ditech will get nothing from the sale, and the two-family house on Warsaw St. is selling for less than half that amount offered in 2015.
Realtor Christine Noonan, who arranged the sale, said the house needs a lot of work, including a new roof, and a new kitchen floor, but it could turn out to be a windfall for the new owner, “Local gentleman, works in construction, owns a few other properties, very excited to get himself in there in order to fix up the property, and get renters in there.”
The Foreclosure Relief Act allows local governments–in this case Lackawanna–to issue fines, as much as $500 a day, against banks that don’t keep their foreclosed properties up to code. Noonan said, within a week after Kearns and other local officials announced Ditech would be one of the first targets of the new law, the Pennsylvania-based servicer walked away.
“At $500 a day, what they would have made on the house would have been eaten up by that, and then attorney fees.”
With all the vacant and foreclosed property across Western New York, Noonan said the new law could become a crucial new tool for the restoring the American Dream.
“Show these banks that we are not going to be held hostage–these homeowners won’t be held hostage–and do the right thing in order to increase our market, and increase the home sales in the area.”