Lander Introduces Bill Requiring Banks to Post Bonds on Foreclosed Homes

City Council Member Brad Lander introduced a bill today that would require banks to help pay for the upkeep of foreclosed homes by posting bonds with a minimum value of $10,000.

“The resources would be there to make sure the communities are not the ones that yet again bear the brunt of the foreclosure crisis caused by banks’ subprime and careless lending,” Lander said. He said that New York differs from other states because banks are not legally required to care for foreclosed property, which means vacant houses in New York end up “going into limbo.” The bill would provide money to help pay for city fines or emergency repairs.

Council Member Ruben Wills said that his Southeast Queens district has been “devastated” by the foreclosure crisis, and pointed to repercussions of deteriorating and neglected foreclosed homes for the surrounding neighborhood.

“As a result of the banks and lenders bad neighbor policies, properties are shuttered but not sealed,” Wills said. “Grass is left unattended and trash is strewn all over. These properties then become dens for illegal activity — drugs, prostitution and crime run rampant.”

Lander said that banks have been slow to follow through on promises to help homeowners modify their mortgages, a lapse that he said is exacerbating the crisis. While the bill does not address mortgage modifications, it shares a common theme of holding banks partially responsible.

“The banks, they received their bailout, this bill is basically a bailout to homeowners, those who live in communities that unfortunately have fallen on hard times,” said Council Member Letitia James. “There’s large stretches in the city of the New York which are now blighted as a result of this foreclosure crisis, and all this bill does is to ensure that the houses now are in compliance with housing laws.” Lander Introduces Bill Requiring Banks to Post Bonds on Foreclosed Homes