New York atty general combats 'zombie houses' after Reuters probe

NEW YORK Mon May 19, 2014 3:20pm EDT

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NEW YORK May 19 (Reuters) - New York Attorney General Eric Schneiderman has launched a statewide effort to combat so-called zombie properties by encouraging the state legislature to pass the Abandoned Property Relief Act he proposed earlier this year.

Schneiderman announced that the city councils of Albany, Poughkeepsie, Elmira, Beacon, Jamestown and Hornell are scheduled to approve resolutions on Monday urging passage of the bill. The city councils of Newburgh, Binghamton and Schenectady have passed similar resolutions already.

The Attorney General's Abandoned Property Neighborhood Relief Act would provide support to neighborhoods plagued by vacant houses. Among other things, the legislation would make banks responsible for the abandoned properties.

A Reuters story in January 2013 revealed how thousands of U.S. homeowners were finding themselves legally responsible for houses they did not realize they still owned six years after the housing crash, after some banks walked away from foreclosures and left abandoned properties in their wake. Municipalities were left to deal with the mess.

Some U.S. municipalities spent public funds on securing, cleaning and stabilizing the houses that generate no tax revenue. Others let the houses rot.

New York is among the states seeking to make banks take responsibility.

"Zombie properties threaten neighborhoods across New York State, from big cities to small towns," Schneiderman said in a news release. "Abandoned homes become magnets for crime, drag down property values and drain municipal coffers. Our bill will keep communities safer and lessen the burden of municipalities still struggling to recover from the housing crisis."

(Editing by Matthew Lewis)

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