The state plans to use up to $20 million of its share of the $25 billion national mortgage settlement to fund land purchases in eight land banks in upstate communities, including the city of Rochester, officials announced Wednesday.
The competitive funding comes from a 2012 settlement between state attorneys general and federal agencies and the country’s top five mortgage servicers.
The government group sued Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc. (formerly GMAC Mortgage LLC), charging their mortgage servicing units with abuse and fraud that led to the recent mortgage crisis.
State lawmakers authorized the land banks as entities that could acquire abandoned or foreclosed properties suitable for redevelopment last year. Until now no state or federal money was set aside to make land purchases, however.
To give communities that might not have a chance to immediately work up proposals a crack at land-bank funding, the land-bank money is slated to go out in two rounds this year and next year, said New York Attorney General Eric Schneiderman.
“By dedicating money from that settlement to land banks across New York, we’ll empower local communities to rebuild their own neighborhoods house by house, block by block,” Schneiderman said.
He helped negotiate the national mortgage settlement, a deal concluded among the attorneys general of 48 states and five major banks and land bank money is to be dispensed through the attorney general’s office.
Other land-bank areas are in the city of Newburgh in Orange County and Onondaga, Erie, Chautauqua, Schenectady, Broome and Suffolk counties.
New York passed legislation in 2011 establishing land banks that can acquire vacant, abandoned or foreclosed properties to rebuild, demolish or redesign. Rochester was approved for a land bank in February.
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