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NYS AG Announces Expansion Of Homeowner Protection Program

WAMC, Allison Dunne

New York Attorney General Eric Schneiderman was a keynote speaker at a housing conference today in Orange County. He unveiled plans to extend a homeowner protection program.

New York state Attorney General Eric Schneiderman says his office will additionally fund the Homeowner Protection Program, or HOPP, up to $40 million, given the number of distressed homeowners still in need of the free housing counseling and legal services the program provides.

“And today I’m announcing that we are extending the program for another two years. We originally committed $60 million for three years, and we awarded $20 million each of the first two years to provide services across the state, and a lot of the initial funding had to do with just setting up the network and the communications,” says Schneiderman. “In the third year, we boosted that up to almost $25 million, and the additional funding that I’m announcing today will ensure that we have another two years of the program. So we’re entering its third year. It’s now going to be at least a five-year program.”

City of Middletown Mayor Joseph DeStefano says that’s good news.

“I think the expansion of the program will be key for the community. He’s on the right track,” says DeStefano. “And I think you’re not going to get a real good feel for a program after two years. I think the expansion up to five years will really show a track record of the impact.”

Schneiderman Monday also released a report showing that 34,000 New York homeowners received assistance through HOPP in the program’s first two years, just more than 5,000 of whom are in the Hudson Valley. Schneiderman says New York is second only to Florida in terms of the share of distressed mortgages because of a slow foreclosure process. In addition, Schneiderman says he is addressing the problem of vacant and abandoned properties two ways.

“Pace University did a study that found in the City of Newburgh, just a city of only 4 square miles, there are about 600 vacant homes. So we decided we needed a broader strategy to lift up communities that were struggling with this problem, and we’re doing that in two ways,” Schneiderman says. “One is by funding and expanding land banks, mentioned earlier. And the other is by organizing an effort that I’m hopeful will be successful this legislative session to change the law on so-called zombie properties.”

Land banks are non-profit organizations affiliated with local governments that acquire distressed properties and rehabilitate them. Schneiderman says he announced in August an increase in the number of allowable land banks from 10 to 20, and he highlighted the Newburgh Community Land Bank as a model of how a land bank should work.

As for proposed legislation addressing zombie properties, Schneiderman says he seeks to close a loophole, changing state law to make lenders responsible for delinquent properties soon after they are abandoned rather than at the end of a lengthy foreclosure process. Schneiderman explains why he is optimistic the legislation will pass in the upcoming legislative session.

“It’s something that we really figured out and proposed relatively late in the legislative session last year, but I’ve been talking to people in the Senate and the Assembly since then, and I think we’re building support,” says Schneiderman. “The local government officials, the mayors and the county executives and people who really end up paying the cost of maintaining these zombie properties, have come forward and they’re going to be more aggressively supportive at the beginning of the legislative session, which is something we just didn’t have last year, so I’m much more optimistic about us getting it done this year.”

Newburgh City Councilwoman Karen Mejia says the legislation would help her city.

“The zombie properties is one of the things that’s, they’re everywhere in the City of Newburgh, Mejia says. “So holding the banks accountable for that and getting some clarity in what the next steps for those properties are is I think the next key thing to turn those distressed properties back on the tax roll.”

Middletown’s DeStefano also wants to see the legislation pass.

“Myself along with other mayors in the region have sent letters of support asking the state legislature to adopt this program because it have a very negative impact on communities,” DeStefano says. “When banks take over properties, they just let them sit there before actually taking formal ownership and the property deteriorates, reduces property values, puts a heavy burden on local municipalities to maintain. And it’s just an overall depressing impact on a community.”

Before Schneiderman’s speech, Pattern for Progress President and CEO Jonathan Drapkin presented the first-term Democrat with a certificate in recognition of his work to help the state of housing in New York. Schneiderman delivered his speech during Pattern’s Regional Housing Summit.

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