NJ Towns Have a New Way to Fight Zombie Foreclosures
While the New Jersey housing market recovers from a slide in home prices, the Garden State continues to grapple with "zombie foreclosures."
Zombie foreclosures are properties that have been abandoned by their owners and sit vacant and empty in a neighborhood. Oftentimes, these are properties that have not yet been repossessed by the bank. These zombie foreclosures are not following the routine process, which usually includes a homeowner still on the premises, or one who’s in contact with their lender.
In some cases, these properties are prone to squatters, vandalism and drug deals.
According to RealtyTrac, there were about 17,000 zombie foreclosed properties in New Jersey at the start of the summer.
Up until now, towns couldn't do much to remedy the situation, but there is a new weapon in their arsenal.
"Under a recently enacted law, local municipalities are able to now fine mortgage companies that hold the paper on these abandoned homes, $1,500 dollars a day if they don't upkeep and maintain these properties," said Assemblyman Paul Moriarty (D-Turnersville), who sponsored the measure.
Out-of-state creditors face even bigger fines at $2,500 a day.
Moriarty called the fine "significant," adding that it's going to get the attention of the companies that own these abandoned properties and force them to either sell them or maintain them.
Abandoned homes can be a nightmare for those residents around them, according to Moriarty, especially for those living right next door.
"If you ever want to move you're probably not going to be able to sell your home," Moriarty said. "No one wants to buy a home next to an abandoned home.It also invites vandalism, vagrants, all kinds of things, and houses with backyard pools that are abandoned become breeding grounds for mosquitoes."
Moriarty said that in order to municipalities to take advantage of the law, they first have to pass a simple ordinance.
The law is not only beneficial for those residents living near the abandoned property, but also to the town itself. Moriarty said before the law was passed, towns would send their public works people to cut the lawn, and then put a lien on the property for the cost of cutting the lawn.
The law was signed in August 2014.