TODAY'S PAPER
Good Afternoon
Good Afternoon
Long IslandSuffolk

In Babylon, distressed homes carry extra cost for banks, lenders

Copiague has nearly 250 properties on the Town

Copiague has nearly 250 properties on the Town of Babylon's registries of mortgages in default and abandoned houses. Credit: Chris Ware

The Town of Babylon is putting more financial pressure on banks that own properties in pre-foreclosure by changing its mortgage-in-default registry fees from annual to biannual payments.

The registry, created by the town in 2016, requires banks and mortgage lenders to register with the town as soon as a home mortgage goes into default. The fee is $200 per property, of which the town keeps half while the remainder goes to Melbourne, Florida-based ProChamps, the company hired by the town to manage the registry.

Since the registry started last year, the town has netted about $172,000 from about 1,720 properties. That money goes back into the general fund, said town spokesman Kevin Bonner.

While the revenue has been welcome, town officials said, the real value of the registry is that it provides crucial contact information for mortgage lenders that in the past has taken town workers months to pin down. The town, like all of Long Island, has battled the rise in “zombie” homes, properties stuck in the foreclosure process that have been abandoned and fallen into disrepair. While the majority of the houses on the mortgage-in-default registry — 1,400 — are occupied, the information garnered from the registry is being applied to the town’s abandoned home registry, which includes homes in pre-foreclosure, foreclosure and those fully owned but unoccupied. The town hopes that the number of zombie homes can be reduced by tracking properties while they are still in pre-foreclosure.

“It was working really well, but what we also found out was that the mortgage companies continue to flip their mortgages to other banks and sometimes we’d have to start the research from scratch all over again,” said Tony Martinez, the town’s deputy supervisor. “A year is a long time and a lot of things happen.”

ProChamps, which works with about 200 municipalities around the country, tracks Suffolk County mortgage default filings and then contacts the mortgage companies to notify them to register.

“These properties are almost like baseball cards; they’re traded back and forth,” said Kevin Sidella, ProChamps’ director of sales. “We’re trying to put the municipality in contact with someone faster.”

The town’s abandoned homes registry — generated from complaints about a property’s condition — has 263 properties, of which 85 overlap with the mortgage-in-default registry, Bonner said. The abandoned homes registry has a fee structure that starts at $100 annually for properties vacant less than a year to $5,000 annually for properties vacant for 10 years.

The companies with the highest number of properties on the pre-foreclosure registry are U.S. Bank National Association as trustee, with 311, Wells Fargo with 198 and Deutsche Bank National Trust Co. with 183, Bonner said. U.S. Bank and Deutsche declined to comment on the town’s fee change. Wells Fargo spokesman Jim Hines said the company will “comply with any registration changes” the town implements but “ideally would advocate for a single, simplified registration process using a single fee structure.”

Bonner said the fees are intended to pressure banks to more quickly move their properties through the foreclosure process and to maintain them.

“If Wells Fargo doesn’t want to pay two fees, they should speed up their efforts to get these properties back on the market and off of these lists,” he said.

Time is money

West Babylon has the highest number of properties on the mortgage-in-default and the abandoned house registries. Babylon Town officials want banks to more quickly move their properties through the foreclosure process and to maintain them.

Mortgages-in-default

West Babylon — 380

Deer Park — 272

Wyandanch — 239

North Amityville — 227

Copiague — 202

North Babylon — 189

Lindenhurst — 163

East Farmingdale — 37

Oak Beach — 10

Wheatley Heights — 2

Babylon — 0

Abandoned houses

West Babylon — 58

Wyandanch — 36

Deer Park — 34

Lindenhurst — 29

Copiague — 28

North Babylon — 27

North Amityville — 23

Wheatley Heights — 18

East Farmingdale — 7

Babylon — 2

Oak Beach — 1

Source: Town of Babylon

Latest Long Island News