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Bringing “Zombies” Back to Life

“Zombie” mortgages are born when a lender has initiated, but not completed, the foreclosure process on a property. The property owners often vacate the property immediately, even though the foreclosure process can take month to be finalized – or is never finalized. With the owners long gone, the property languishes, uninhabited and unattended.

These vacant and unclaimed properties create real problems for the communities in which they are located. Unkempt homes and lots can detract from the appearance of the neighborhood, attract pests, harbor criminal activity and bring down surrounding property values.  It often falls the public sector to take responsibility for these problems, but municipalities with many such properties can become overwhelmed by the task of keeping up with them.

In a Shelterforce blog post, Katharine Greider talks about how the New York State Attorney General’s Office created a fund (seeded by a bank settlement over misconduct that helped bring about the foreclosure crisis) to help municipalities in New York deal with the causes and effects of foreclosure. Local Initiatives Support Corporation (LISC) is managing the $70 million fund, a portion of which supports “zombie relief” grants.

Providing examples from Cheektowaga and Buffalo, the post describes how municipalities are approaching the zombie problem in different ways, and how LISC is helping them to do so.

Read Bringing “Zombies” Back to Life

Posted in Affordable Housing

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