NY State Senator Seeks to Hold Lenders Accountable

In New York, one state lawmaker is pushing for new legislation that would be aimed at not allowing foreclosures to destroy a neighborhood or community by sitting on the market unowned and uncared for. This tends to drag down home values in nearby communities, and can lead to even more foreclosures as a result.

State senator Jeff Klein is proposing legislation that would seek to hold lenders accountable for caring for the condition of homes on which they foreclose. Klein cited a recent report that indicated that more than 3.5 million homes in New York state experienced a drop in their value due to the presence of foreclosure homes nearby. The report showed that on average, a foreclosure devalues a nearby property by nearly $5,000, and in some cases, by much more.

His Neighborhood Preservation Bill will move through the legislature soon. Klein bases his argument for the bill on the fact that the lenders are responsible for foreclosing on homes, and should therefore be responsible for the repercussions foreclosures have on nearby homes and homeowners.

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• Frank Warns Lending Industry not to Oppose New Foreclosure Assistance Legislation