New York DFS Fines Loan Servicer $100,000 for Violations of Vacant and Abandoned Property Law

On January 16, the New York Department of Financial Services (DFS) announced that it fined a New York state-registered mortgage loan servicer $100,000 for failing to maintain two properties in New York under New York’s Abandoned Property Relief Act, which requires banks and mortgage services to fulfill certain maintenance obligations at “zombie” properties.

According to the DFS announcement, the loan servicer had failed to maintain the properties for over 230 days by, among other things, failing to properly secure the premises; maintain the premises in good repair, free of rubbish and debris; and keep all sidewalks, walkways, stairs, driveways, parking areas and similar areas in a proper state of repair and maintained free from hazardous conditions. The loan servicer also allegedly failed to respond to DFS notices regarding the properties on a timely basis.

Per the parties’ consent order, the servicer will, in addition to paying the fine, provide confirmation to DFS within ​30 days that all properties subject to the requirements of New York’s Vacant and Abandoned Property Law have been registered with the DFS registry of vacant and abandoned properties, are being maintained, and that all quarterly filings have been made for each property.  The servicer will provide the same confirmation to DFS on a bi-monthly basis, along with inspection reports and maintenance records.