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Smithtown tracking hundreds of homes in financial distress

Town of Smithtown investigator Karen Sylvester visits a

Town of Smithtown investigator Karen Sylvester visits a vacant home on New York Avenue. Photo Credit: Newsday / Steve Pfost

Smithtown Public Safety officials this summer will finish a massive database of residential properties used to identify, track and fix those close to or trapped in foreclosure, commonly known as zombie homes.

Ordinance enforcement officer Catherine Caillat and a team of Smithtown town and temporary investigators hired for the project identified 249 vacant homes with mortgages in arrears and another 1,069 in pre-foreclosure, with two or more consecutive missed payments. They found 745 properties in tax arrears totaling $8,651,020. By late May, the team had inspected 36,464 of the town’s 40,855 one- to four-home residential properties.

Officials said they found concentrations of problem properties in the hamlets of Smithtown and Nesconset, though the overall numbers are small compared with foreclosure hot spots upstate and on Long Island’s Sandy-hit South Shore.

The goal, they said, is a nimbler government able to address problem homes long before they need to be demolished, a step some other Long Island governments have taken.

“We were always complaint-driven,” Caillat said. Now, “We’re becoming data-driven, so we can anticipate if there is an area that we need to focus our attention on.”

Officials began to notice higher numbers of vacant houses in 2010, as the 2008 financial crisis rippled on. “There were more initially because there were predatory lenders and interest rates were so high,” Caillat said. Identifying the homes wasn’t always easy — well-meaning neighbors often mowed lawns and picked up mail — but they learned to look for clues, such as tall grass and windows bare of curtains or blinds. Investigators made so many trips to search deeds at the Suffolk County clerk’s office in Riverhead that the task got a name, said town investigator Karen Sylvester: the Riverhead Run.

The database, built over the past year with $610,000 in New York State grants, makes property ownership records available instantly to town departments, villages and fire departments, along with contact information for banks and servicers.

To augment those records, investigators compare notes with colleagues from other departments and officials from local water districts, since service cutoffs are often an early sign of vacancy.

Once investigators have identified a property as at risk, they try to visit the homeowner to provide counseling. In some cases, grants are available to help mortgage payments, or the bank will renegotiate the terms of the mortgage loan.

“We’ve been aggressive,” Public Safety Chief John Valentine said, but “we’re not going out there with bulldozers … You don’t want those families displaced.”

For properties that are already vacant, investigators contact the banks to ensure structures are secured and maintained, armed with a 2016 New York State zombie house measure that requires banks to do the work.

Helene Caloir, director of the New York State fund for the nonprofit Local Initiatives Support Corporation, which is administering the grants that funded most of Smithtown’s work and other projects from 15 other Long Island municipalities, said that while most foreclosures occur in low- to moderate-income communities, municipal officials across the state are “surprised by the actual number of their zombies” and otherwise vacant houses. “They are everywhere, and Long Island has very high foreclosure rates, some of the highest in the country.” The grants were announced in 2016, funded by settlements between then-state attorney general Eric T. Schneiderman and banks over their acts during the foreclosure crisis.   

So far, 33 Smithtown homes have been rehabilitated and resold, but the town has 319 legal actions pending to force banks to do property maintenance. Investigators have had difficulty reaching some banks that Caillat said are playing a “shell game” with frequently traded deeds and changing phone numbers and emails.

Sylvester, touring a recently identified zombie house on New York Avenue in Smithtown, surveyed the backyard: rotted deck, abandoned grill and desolate kiddie pool. “This was someone’s life,” she said. “When something like this happens, it’s sad.”

The state offers tips for homeowners facing foreclosure:

  • Contact your lender or servicer immediately.
  • Contact a not-for-profit housing counselor. Reach an alliance of HUD-approved counseling agents, servicers, investors and mortgage lenders that provide free foreclosure prevention assistance at 888-995-4673.
  • Seek legal assistance.

Source: NYS Department of Financial Services

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