by on September 19, 2018


  • The de Blasio administration is taking big banks to court over their failure to clean up a cluster of abandoned houses

  • The city sued 9 financial firms, alleging they have persistently shirked their responsibility to secure five abandoned homes in Brooklyn

  • State law requires banks and subcontractors to periodically inspect foreclosure homes and take over maintenance cost if residents bailed out

The de Blasio administration is taking big banks to court over their failure to clean up a cluster of abandoned houses as the distressed properties wind their way through snails-pace foreclosure proceedings. 

The city's Department of Housing Preservation and Development filed lawsuits Wednesday against four lenders and five mortgage servicing companies, alleging the financial firms have persistently shirked their responsibility to secure five abandoned homes in Brooklyn. 

New York State's 2016 "Zombie Home" law requires banks and their subcontractors to periodically inspect houses going through foreclosure -- and if residents have bailed out -- take over the cost of property maintenance. 

"Our goal is to get these banks to take accountability for these properties," said HPD Deputy Commissioner Leila Bozorg. 

One of the zombie homes targeted by the legal action is 1889 Bergen Street in Brownsville, where I-Team cameras spotted waist-high weeds sprouting from a mound of garbage on the front porch. Nearby, a condom and a crushed malt liquor can lay on the front steps. 

According to the HPD lawsuit, CitiMortgage and its servicing company should have cleaned the property up months ago. 

"My mother actually did call the bank about it and they repeatedly said they’re going to do something about it, said Geoffrey James, who lives next door. "It's been years and nothing has been done."

The I-Team reached out to a representative of CitiMortgage for comment. We’re waiting to hear back.

In another zombie home lawsuit, the city claims Wells Fargo failed to secure a Crown Heights property at 1831 Park Place. Yet another lawsuit alleges one of Wells Fargo’s mortgage servicers, a company called Ocwen, neglected a zombie home at 31 Essex Street in Brooklyn’s Highland Park neighborhood. 

Marco Lopez, a 31-year-old who lives next door to that dilapidated house, says it has been notorious for squatters and drug activity.

"To be honest it is not safe," Lopez said. "A lot of people go in there for drug use or random sexual encounters. So this one time somebody went in there. They had an overdose and somebody died.” 

The I-Team has reached out to the FDNY about the alleged overdose.   

Kevin Friedlander, a spokesman for Wells Fargo, said the bank is looking into the property at 1831 Park Place, but said Wells Fargo "does not have ownership" of 31 Essex Street and directed the I-Team to speak with Ocwen, the servicer. 

Friedlander said Wells Fargo has not seen the lawsuit so can't comment specifically on it, but added in his statement, "We work diligently to manage vacant properties for which we are responsible and in a manner that benefits the community. This includes registering vacant properties as required by local ordinances and resolving any violations, fines or fees."

A spokesman for Ocwen said the firm was looking into details related to 31 Essex Street. 

"The lawsuit was filed today and involves a single property in Brooklyn, NY," Ocwen spokesman John Lovallo said in a statement. "We are conducting a thorough review of the status of the property."

According to HPD, New York’s zombie home law designates both lenders and their servicers as responsible parties for the safety and security of properties in foreclosure. 

"We have our surveys and the photos and our work with the law department of the city of New York to prove that we don’t think they’re in compliance," Bozorg said. 

In all, the city is demanding lenders and their servicing companies pay more than $1 million in fines and reimbursements for repairs the city has already made to try and keep the zombie homes safe. 

The state's zombie home law calls for up to a $500 penalty for each day an abandoned foreclosure fails to meet safety and environmental health standards. 

The city expects to file more zombie home lawsuits against lenders and their subcontractors in the months to come.

By Chris Glorioso

Read More:

City Plans to Use Eminent Domain to Create Affordable Housing for Homeless

City holding on to thousands of vacant properties that could ease housing crisis

NYC will turn vacant land into 500 affordable homes

Homeless NYC: Turning vacant properties into permanent housing

A Vacant Lot in the Bronx Is About to Make History


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