New York Attorney General Schneiderman (center) wants to double the number of land banks in New York to better deal with the knotty problem of foreclosed homes.
Photo: Office of Attorney General Eric Schneiderman

New York state Attorney General Eric Schneiderman is proposing plans for legislation to require that mortgage lenders take responsibility for abandoned properties statewide. Under his proposal there would be a statewide registry to allow municipalities to track abandoned homes and enforce local codes. It would also double the number of land banks statewide to 20. Note: A land bank is a public authority that holds, manages and develops foreclosed properties.

A state bill sponsored last year by Sen. Timothy Kennedy (D-Buffalo) to require mortgage lenders "to maintain the property in good faith" is still "sitting" in the Senate's Housing, Construction and Community Development Committee.

Scheiderman's proposal targets the problem of vacated foreclosed homes falling into disrepair and attracting squatters, gangs, et al. Editor's note: It would seem to make more sense to allow delinquent homeowners to remain in their homes and pay what they can, while the bank either renegotiates the mortgage or finds a new buyer.

The state legislature did established land banks three years ago to help municipalities deal with foreclosed properties. The land bank, a nonprofit organization, can acquire vacant, abandoned or foreclosed properties and decide whether to rebuild or raze them. Nearly $13 million in grant funding has been awarded to land bank programs in New York state, but New York's largest city has no land banks, and neither does Albany, the fourth largest city (pop. 97,856). Schneiderman pointed out some large cities in the state have a "critical need" for the kind of community redevelopment that land banks make possible.

Last year, Schneiderman filed a lawsuit against HSBC Bank USA and HSBC Mortgage Corp. (USA) for failing to follow state law regarding foreclosures and putting homeowners at greater risk of losing their homes.