Banks Letting Foreclosed NYC Homes Fall Into Dangerous Disrepair

Though New York City real estate remains at a relative premium, a new report says that banks have ignored the upkeep of thousands of seized foreclosure properties, allowing them to fall into horrid levels of disrepair.

In the borough of Queens alone, 969 of the 1,157 bank-owned homes currently have open violations from city inspectors.

The New York Daily News cites several examples, including a Brooklyn residence that leans like a drunk on a bender, features a lovely crack in the front exterior wall and whose chimney has fallen onto a neighboring building.

“You can see right through the building,” a man who works next door tells the News. “You would think they would come and take care of it.”

The city has fined US Bank a total of $40,000 over this building, none of which has been paid. However, a rep for U.S. Bank, which holds the second most number of foreclosed homes in the city, tells the Daily News that the company it hired to maintain the property is responsible for remedying violations.

“This is something that is a huge problem,” said NY State Senator Jeff Klein, who sponsored a 2010 law requiring banks to maintain foreclosed properties between the time of foreclosure and the eventual auction. “I wanted to protect the community because when there is a foreclosure on a block, it causes a lot of trouble.”

Another example in the News story is the Queens building which has received 16 violations since Deutsche Bank, the lender with the most foreclosed homes in the Big Apple, seized the property in 2009.

In additions to violations for rodent infestations, the two-family home had to be vacated in January after the city found out it been illegally carved up into 13 single-resident occupancy apartments. The bank currently owes $58,000 for various violations.

While a Deutsche Bank rep also tried to pass off responsibility for the dilapidated building to a third-party maintenance company, he did say the magic words: “[T]he bank takes such issues seriously and takes the appropriate action when notified of alleged violations.”

Unfortunately, when banks — or the companies banks hire to maintain foreclosed properties — allow them to fall into disrepair. It only serves to make matters worse for those neighbors who have responsibly paid their mortgages. If the bank is going to foreclose on a home, shouldn’t it be held to the same standards as a homeowner?

Banks default on duty, let foreclosed homes become eyesores – and disregard fines [NY Daily News]