Comprehensive Legislative Package Enhances Mandatory Settlement Conferences and Establishes a Consumer Bill of Rights to Help People Remain in Their Homes, Creates the Community Restoration Fund
Combats Blight Created By Zombie Properties By Imposing a Pre-Foreclosure Duty on Banks and Servicers to Maintain Zombie Homes, Creating an Electronic Registry of Abandoned Properties, and Expediting Foreclosure For Vacant and Abandoned Properties to Get Them Back on the Market
Earlier today, Governor Cuomo signed legislation to prevent foreclosures and curb the threat posed to communities by “zombie properties” while in Onondaga County. The bill was passed as part of the 2016 Legislative Session and is a boon for the economic health and public safety of communities and homeowners who would otherwise be at risk of losing their residences. The legislation combats the blight of vacant and abandoned properties by expediting the rehabilitation, repair and improvement of these properties, and enabling the State to assist homeowners facing mortgage foreclosure. More information is available here.
Onondaga County was the first stop of the Governor’s statewide tour to sign the sweeping legislation today. He will also host events in Manhattan and on Long Island. Video, photos and transcripts of those events will follow.
VIDEO of the Governor’s remarks and signing the legislation is available on YouTube here and in TV quality (h264, mp4) format here.
AUDIO of the Governor’s remarks is available here.
PHOTOS of the event will be available on the Governor's Flickr page shortly.
A rush transcript of the Governor’s remarks is below.
Thank you very much, thank you very much. It’s my pleasure to be back in Onondaga. One of the laws we passed that hasn’t been mentioned. We passed a law that whenever the Governor visits Onondaga, the sun will shine, and I’m glad to see that law is working. It is a beautiful, beautiful day. First, to all my friends here, County Executive Joanie Mahoney, let’s give her a big round of applause for her great job. And to Ryan McMahon, Ron Benedetti, Manny Falcone, and Van Robinson. It’s a pleasure to be with you gentlemen. We have a motorcycle ride coming up, Manny, and we are going to see how good you are on that bike, I’m going to take you up on that. And to the state representatives, Pam Hunter who is a relative newcomer in Albany but we loved having you. It was a very productive first year for you. Congratulations to you. Bill Magnarelli, it was not his first year, but he brings experience and strength to the table and he always does a great job. Pleasure to be with you Assemblyman Magnarelli. And Senator Dave Valesky, who really is a star in this senate, and we must give him a round of applause.
We have Senator Jeff Klein, who is not from Onondaga. He actually represents an area of New York City. But he’s with us today because he has championed this issue of so-called “Zombie” homes, abandoned homes. He’s worked on it for years and years, and this is in many ways a product of his work over many years. Substantive work, important work. And it’s going to change policy all across the state. So the entire state thanks Senator Klein on his good work on this and it is a pleasure to have him with us today. First, you can see on the smiles of your state delegation that it is good to be home for them. They’ve been sequestered in Albany for the past six months. You know the legislative session goes from January to about June. It was over last week and when you get towards the end of that legislative session, it’s like a horse going back to a barn. Everybody just wants to get home. It’s good to see that they have their color back and their smiles back, now that they’ve been home for a while. But it really was a productive legislative session. As you heard from Jeff Klein, a lot of firsts where New York once again tackled the toughest problems and we did it first.
The paid family leave program is going to be a national precedent, where we give women and men the ability to both honor their families and be there for their families in times of hardship, in times of births but to also maintain their employment. New York State is the first in the nation where we are going to test every school for lead in the water. New York State is the first state to do this and it is long overdue.
More education funding from the state to local governments and local school districts than ever before – $25 billion for education because that is our priority. We passed a bill that we signed yesterday that has this state with a model program to fight heroin and opioid addiction which is a scourge all across upstate New York. The White House called to ask us if they could use our program as a model for the other states. That is how good that program is.
And on top of it all, we passed something that gives me the opportunity to make additional wages. We passed the greatest tax cut for the middle class, where the middle class from $0 to $30,000, the income tax rate is the lowest in seventy years believe it or not. The way I make outside income on that bill is that I bet everybody who I meet: do you think that the state raised taxes or lower taxes? And I always win, because no one believes that government actually lowers taxes. You know, it is an oxymoron, but we did it in the state of New York and the bill that we are here to talk about today. The abandoned properties bill, the “zombie” properties bill.
This is a problem that has gone on for seven, eight years. This is often a legacy from the 2007, 2008 mortgage crisis that this nation went through and what we are still going through. This is when the banks, frankly, in my opinion committed mortgage fraud on this nation and did mortgages for people who couldn’t handle it, on a theory that real estate was going to continually increase ad infinitum so they gave mortgages to everyone, like you were giving out newspapers. It worked until it didn’t work and the mortgage crisis happened and it drove down real-estate values and drove down the economy overall and many of these properties are properties that got caught up in that mortgage meltdown.
Many of these properties are properties that got caught up in that mortgage meltdown and took a long time and it is taking a long time to unravel that mortgage crisis. You have mortgages that were put into bundles and then bundles were sold to intermediaries and there was this whole chain that defrauded the consumer and now to resolve it, it’s very complicated because you have to pull that mortgage out of that pool of mortgages. You have to go through a foreclosure proceeding, and in many ways, the banks have been complicit. The banks do not want to take responsibility for properties like this one. If the bank takes responsibility, well then the bank is going to have to mark down that mortgage to what that mortgage is actually worth, which will reduce the value of the bank and the bank is going to have to come here and pay for the cost of maintenance. And the bank is going to be responsible for cutting the lawn and paying the taxes and keeping the house up and they do not want to do it. They would rather shirk their responsibility. So they have not even learned the lesson that was about 2007 and about 2008. You cannot shirk your responsibility and we are getting tired of the banks making money on the backs of hardworking New Yorkers and hardworking Americans and it is over.
When they allow an abandoned property like this to remain abandoned, it does not just devalue this property, it devalues properties next to it and then the entire community. This is not just a Solvay problem, it is not just an Onondaga problem, it is not just a New York problem – it is a national problem. Now, New York happens to have one of the highest concentrations of abandoned homes, depending on whose estimate you pick. Somewhere between 700 and 1200 properties. We passed a law that basically is going to expedite the transfer of these abandoned properties. First, it has a bill of rights for the owner because if we can get the owner back into a situation where they can afford the home with rates and payments that they can afford and a mortgage that is adjusted to the actual value of this home, that is what we want to do. We do not want to displace owners. We have a bill of rights for the owners. We then have a settlement conference procedure where the bank has to come to the table with the owner and try to work out terms for a new mortgage because we want that mortgage adjusted so that the owner can stay in the home and we want that on an expedited basis.
The third provision is once the home is basic, the bank is then responsible for the maintenance of the home once it is vacant, not once it’s foreclosed. But once it is vacant, and the bank knows it is vacant – or the bank should have known it was vacant – then the responsibility for the bank to step in kicks in. If the bank does not step in, they are subject to a $500 a day penalty. And also the local government or the state through an agency called the Department of Financial Services can come in and do the maintenance and take over the property and take it from the bank. So the short story is, situations like this that went on for years and years, it’s over. And the banks have to step up and recognize their responsibility, and if they don’t do it they’re going to be fined. And if they don’t do it the local government can step in and do it or the state can step in to do it, and they’re going to get the bill. Because I’m tired of having homeowners pay for the profits of banks. It ends, and it’s going to end today in the state of New York.
And you know, on the way here today, I just stopped and did another quick tour of the State Fairgrounds, which has gone through such a transformation. The County Executive and a number of us were there the other day to cut the ribbon on the new entranceway which just looks so much better. The entire fairgrounds has had a face lift which was long overdue, but you really get the sense that it’s a new day. So many positive things, the amphitheater, that the county did which is beautiful. We were here a couple of weeks ago to announce new jobs coming to Central New York with Terakeeet and Ascension Gaming. Just good news after good news. The unemployment numbers came out yesterday or the day before. Central New York in one year, unemployment dropped from 5.5 to 4.3 percent in one year. Just think about that.
I know it has been a long haul but we are turning around Central New York. You see it everywhere you go. There’s evidence of the turnaround. And this is going to solve another big problem that anchored neighborhoods for many, many years. Today is the beginning of the end for these homes that have artificially had their values depressed because the banks haven’t been responsible. Again, that ends in about 30 seconds when I sign that bill. Thank you very much.