Councilman: Banks Should Maintain Foreclosed Homes

BROOKLYN — A Brooklyn city councilman wants to put banks on the hook for maintaining the homes they foreclose on in New York.

Democrat Brad Lander plans to introduce a bill on Wednesday requiring banks to post a $10,000 bond with every foreclosure case, which the city could tap to pay for housing code violations and emergency repairs.

“You wouldn’t need to worry about how to collect the fines. You could just take them from the bonds,” Lander said.

He said that would give banks reason to keep homes and apartment buildings in good shape, even if the owners are in court for not paying their mortgages.

“This would have them invest in and care for the properties in a much more tangible way,” he said.

An estimated 30,000 foreclosures are pending in the five boroughs, with many cases lingering for years even as owners abandon their properties.

In January, the city launched a program to find apartment buildings whose owners are behind on their loans and neglecting maintenance – offering them help to make repairs, but cracking down if they don’t.

Research from New York University’s Furman Center for Real Estate and Urban Policy shows that foreclosure cases in a neighborhood bring down the values of other homes around them.

The city Housing Department is reviewing Lander’s bill to see whether it would create an administrative burden and how it would affect the foreclosure process.