New York Attorney General Eric Schneiderman said he will propose a billthat would regulate how the state's mortgage lenders treat propertyduring the foreclosure process.

The measure, which would be an expanded version of legislationproposed during the last legislative session, focuses on curtailingso-called zombie properties or vacant and abandoned homes leftunmaintained during a long foreclosure proceeding.

The measure will also direct mortgage lenders to notifyborrowers who fall into arrears on their mortgage loans that theyhave the right to remain in their homes until a judge declares theforeclosure complete, the attorney general's office said.

In addition, when borrowers abandon property, the measure willpropose mortgage lenders and servicers identify secure and maintainabandoned properties soon after they are abandoned.

“Leaving zombie properties to rot is unfair to municipalitiesand unfair to neighbors, who pay their taxes and maintain theirhomes,” Schneiderman said.

In the next two weeks, Schneiderman said his office willresubmit to the legislature the bill that would require banks totake responsibility for maintaining properties much earlier in theforeclosure process, take the burden off of towns and cities, andallow local governments to more easily identify the mortgagees ofthese properties to make sure they maintain them.

“And as my office enforces the requirement that banks takeresponsibility for these properties, any fines we levy will go intoa fund to help towns and cities hire more code enforcementofficers,” Schneiderman said.

The measures are necessary to help preserve the value andintegrity of nearby properties that have not fallen intoforeclosure, according to the attorney general's office.

Schneiderman has also proposed mortgagers register abandonedproperty on an Abandoned Property Register that his office wouldmaintain. Such a registry would centralize information about theproperty in a location that will be easily accessible to otherstate and local officials.

“The ripple effects of abandoned properties due to foreclosurecontinue; year after year property values plummet and our oncequiet and family-friendly neighborhoods are now becoming hotbedsfor criminal activity,” Independent Democratic Conference LeaderJeffrey Klein said.

More than six years ago, New York State Assemblywoman HeleneWeinstein and then State Sen. Schneiderman and Klein workedtogether to pass legislation requiring that financial institutionsmaintain properties upon foreclosure, Klein said.

“Attorney General Schneiderman's legislation is the next vitalstep in holding banks accountable for these zombie properties inour communities and providing the needed financial assistance tothe localities that are forced to maintain these eyesores. Thisbill will ensure we not only keep our communities safe, but ourneighborhoods beautiful and strong,” Klein said.