Kearns and Western New York Law Center file suit against BSI Financial Services on behalf of Town of Cheektowaga

Modified: December 20, 2022 12:41pm

December 20, 2022

Erie County Clerk Michael P. Kearns holds media briefing regarding the lawsuit filed by the Clerk’s Zombie Property Task Force against Servis One, Inc., d/b/a BSI Financial Services (“BSI”) over failure to inspect, secure, and maintain a vacant and abandoned property in the Town of Cheektowaga. Pictured (L to R) Kate Lockhart, Vacant and Abandoned Property Program Director, WNY Law Center, Erie County Clerk Mickey Kearns, and Samantha R. Axberg, Esq., WNY Law Center

According to the Clerk’s Zombie Task Force, the national mortgage servicer failed to meet the
New York Real Property Actions and Proceedings Law

Erie County, NY- Erie County Clerk Michael P. Kearns and the Western New York (WNYLC) Law Center Stay have filed a lawsuit against Servis One, Inc., d/b/a BSI Financial Services (“BSI”) over failure to inspect, secure, and maintain a vacant and abandoned property in the Town of Cheektowaga under the New York Real Property Actions and Proceedings Law (“RPAPL”) Sections 1308-1310.

Cheektowaga seeks the maximum penalty of $500 per day of BSI’s non-compliance, up to the Federal diversity jurisdiction limit of $74,999.99 for continued failure to secure and maintain the property. Under RPAPL § 1308, mortgage servicers must inspect the subject property’s exterior to determine its occupancy status within 90 days of a borrower’s delinquency and every 25-35 days thereafter. 

“This property has been in distress since 2018 and in April of this year, it once again popped up on the radar of the Zombie Property Task Force and we pledged to hold BSI Financial, the service provider, accountable for the proper maintenance of this home and fix the safety hazards so it was not a neighborhood eyesore,” stated Erie County Clerk Michael P. Kearns. “The property was cleaned up and auctioned in August. However, prior to that time BSI has failed to properly maintain the property, per the New York Real Property Actions and Proceedings Law and we felt we needed to take further action.” 

The New York Real Property Action and Proceedings Law (RPAPL) has been in effect since December 20, 2016. Sections 1308 and 1310 of the law obligates mortgagees and servicers to assume certain responsibilities in connection with vacant and abandoned residential properties securing mortgage loans in their portfolios. Among these responsibilities are the duty to inspect properties securing delinquent loans and to register properties that meet the statutory definition of vacant and abandoned with the Department of Financial Services. 

“Filing this lawsuit against BSI today is an important step to hold banks and servicers accountable in Western New York. Noncompliance is unacceptable,” stated Kate Lockhart, Vacant and Abandoned Property Program Director, WNY Law Center and member of the Zombie Property Task Force. 

The Town of Cheektowaga has diligently committed inspections of the property from March 21, 2018 through June 16, 2022. At each of these inspections, there were violations of the New York Property Maintenance Code. Throughout those inspections, the violations were the same, continuous issues, demonstrating that no work had been done to address the violations in the interim. 

As a result, the Zombie Property Task Force has submitted numerous complaints, through the WNYLC, to the Department of Financial Services concerning the maintenance issues on the property on behalf of the Town.