On January 16, 2019, the New York Department of Financial Services (NYDFS) entered into a consent order with a residential mortgage loan servicer for failing to maintain two vacant properties as required by New York’s Abandoned Property Relief Act (the Act).
The Act requires mortgagees and their servicers to assume certain obligations with respect to the inspection, maintenance, and upkeep of abandoned properties that secure loans in their portfolios. In this case, the local fire department reported the two properties to NYDFS as vacant and abandoned, and not properly maintained. NYDFS located the servicer responsible and discovered that the properties were not secured; were not in good repair; were not structurally sound and sanitary; and were not free of rubbish and debris, as required by the Act.
Accordingly, the servicer agreed to pay a $100,000 fine: $50,000 paid upfront, and in five additional monthly installments of $10,000 beginning on March 1, 2019. The servicer is also required to provide monthly updates to NYDFS regarding the registration and maintenance of all properties for which it is responsible under the Act.