While New York Reels Under Code Violations Lenders are Delaying Foreclosures to Avoid Responsibility
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New York City is dotted with 2,000 foreclosed units owned by the banks with currently 3,750 code violations lying unresolved. Meanwhile, banks across the state are delaying more and more foreclosures in order to avoid responsibility, according to RealtyTrac.com.
Senator Jeffrey Klien has accused the banks of avoiding their duties that they are required to fulfill according to the laws of the state. Housing advocates also contend that because of the banks’ procrastination the conditions of more houses are deteriorating.
According to a survey, the majorities of these properties are owned by Deutsche Bank. This bank is accountable for more code violations than other banks. Against the Deutsche Bank, there are 211 code violation complaints on 285 units. John Gallagher speaking, on behalf of the bank, mentioned that Deutsche Bank is only a trustee and therefore cannot be held liable for code violations.
He added, “However the bank takes such issues seriously and takes the appropriate action when notified of alleged violations, including contacting the loan services responsible for the property or properties in question”. After Deutsche Bank, the second bank with the most violation codes is the U.S. Bank with 163 violations.
Fannie Mae comes third with 141 violations. The spokesperson of the U.S. Bank Tom Joyce said that although he had not seen the list compiled by Senator Klein, he thinks that since the bank is a trustee on these units it has only an administrative role to play and hence it should not be held responsible for repairs.
The service has to attend to these matters. However, in cases where the U.S. Bank is the service, they declare that is “…in our interest to make sure that the property is maintained”. Through making sure a property receives all the necessary repairs, a bank can find a buyer for a housing unit easily.
No one from Fannie Mae came forward with any comment on the matter. After a devastating fire broke out in Bronx, which claimed three lives last April, the focus has turned on the innumerable amount of foreclosed properties in New York and the conditions of these types of properties. It has led Senator Jeffrey Klein and the office of the Mayor Michael Bloomberg to debate about their differing opinions about what they should do in this matter.
A building in Bronx was illegally subdivided with fire escape routes cut off that led to the tragedy. Inspectors had been disallowed entry. The mayor’s office contends that forcible entry is not allowed by the law of the state.
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