Abandoned in Dunkirk: Judge Ends Lawsuit where ONITY is Named a Responsible Party for Zombie Homes

New York: A judge has dismissed lawsuits by Dunkirk over three “zombie properties” because no one apparently followed up on them.

The city opened court action in 2019 against the bank that held the mortgage on the properties, and the company that was supposed to maintain them. However, according to the rulings in January by local State Supreme Court Judge Grace Hanlon, little happened with the cases after that.

Five years later in July 2024, the defendants sent the city, via certified mail, a written demand to resume the cases. The mailing noted that failure to comply could be grounds for dismissal of the cases due to unreasonable neglect of prosecution.

The city did not resume prosecuting the cases within 90 days as requested, Hanlon’s rulings state.

U.S. Bank Trust National Association and Greenpoint Mortgage Funding were named in the suits as the mortgage holding defendants while Ocwen Financial Corp., “a foreign business corporation not authorized to do business in New York,” was included because it is identified in the state’s foreclosure database as the servicer for the property.

The properties are 49 E. Courtney St., 166 W. Second St. and 606 Park Ave. The owners defaulted on their mortgages and/or abandoned the properties. U.S. Bank opened foreclosure proceedings.

Meanwhile, the city alleged, the properties were allowed to deteriorate. For example, eight inspections of the Courtney Street site in 2018-19 found it vacant and in poor condition. Ocwen “failed to proceed with any action to prevent deterioration of the property,” according to Dunkirk’s original filing in 2019. Among the allegations: The company “failed to secure, replace or board up broken doors or windows,” allowed mold to grow, and didn’t fix outstanding code violations.

Dunkirk sought civil penalties against the defendants under state law that allows fines. It wanted $500 a day in penalties on each property as long as it was not maintained.

However, “it appearing to the satisfaction of this court that each of the conditions precedent for dismissal for want of prosecution… have been satisfied,” Hanlon dismissed the cases.

The Collucci and Gallagher law firm from Buffalo represented Dunkirk in 2019 when it originally filed the cases.

The houses at 49 E. Courtney St. and 166 W. Second St. no longer exist, and the lots are vacant. The house at 606 Park Ave. still stands. “For sale” signs are on the front lawn of a structure that looks to be in poor condition, with the front windows boarded up.