City Council Votes to Require Bank Notification Of Any Foreclosure Action on City Housing
CITYWIDE — In an effort to improve the quality and timeliness of information available to the city regarding residential properties subject to foreclosure, the City Council has passed legislation that it believes will strengthen and support neighborhoods when a property in the community is facing foreclosure.
The legislation requires banks to notify the Department of Housing Preservation and Development (HPD) within 15 days of beginning foreclosure proceedings.
By providing the HPD with notice shortly after a foreclosure action is initiated, this bill will allow the department to focus its resources on providing support to more financially distressed properties.
When faced with foreclosure, the physical condition of a financially burdened property often deteriorates quickly, leading to a range of justified complaints from concerned tenants and neighbors. The goal of the new legislation is to alert the HPD of foreclosures in a more efficient way so that when possible, it can focus its resources to help safeguard tenants from living in substandard conditions, according to Council Speaker Christine Quinn.
As financially distressed buildings are more susceptible to conversion into boarding houses to generate income, this bill will also assure that other agencies responsible for the enforcement of conditions related to illegal conversions will have access to critical information.
Additionally, the HPD will be required to post on its website the number of foreclosure actions that have begun and remain pending in each community district on a quarterly basis. The agency must also publish basic information about buildings with 20 or more units that are subject to foreclosure.
Under the new legislation, banks who fail to notify the HPD would be liable for a civil penalty for each week that they do not alert the agency.
“We’ve all seen the effect the foreclosure crisis has had on our city,” said Quinn. “Blocks that were once robust are now decrepit. We’ve seen properties fall into disrepair. And we know that buildings in foreclosure are likely to have severe violations. But we don’t always know that buildings are in trouble until it’s too late.
“This is a piece of legislation that fulfills a commitment I made in my State of the City address. It will support communities and streamline communication between the city and banks when dealing with foreclosures. With swift notice, the HPD will be better equipped to target distressed buildings, closely monitoring them to ensure they don’t fall into disrepair. The bill’s online component will provide communities and housing advocates with greater information about the effects foreclosure has had on the neighborhoods they love and want to see prosper.”
Commented Erik Martin Dilan, Housing & Buildings Committee chair, “Our city continues to feel the impact of the foreclosure crisis that has been gripping this nation for the past several years. The reporting requirements in this bill will add a certain level of transparency to foreclosure actions so that the city can keep track of these financially distressed properties and help prevent them from falling into a state of disrepair.”
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