New York Banking Department and RealtyTrac Comment on First Quarter 2008 New York Foreclosure Filings
New York State Less Impacted Than Other States;
Certain New York Counties Disproportionately Affected by Foreclosure Filings
April 29, 2008
New York, N.Y.: The New York State Banking Department and RealtyTrac® commented on the report published today by RealtyTrac, reflecting the results of their nationwide quarterly review for the period ending March 31, 2008. The report notes that there are several states that are particularly hard hit by the sub-prime mortgage crisis, for example, Nevada and California, which ranked first and second, respectively, in terms of foreclosure rate. New York State ranked 30th in terms of foreclosure rate, or one in every 550 households compared to the national average of one in every 194 households.
According to RealtyTrac there were 14,377 foreclosure filings for properties in New York during the first quarter of 2008. This represents an increase of 14 percent compared to the fourth quarter of 2007, and 40 percent compared to first quarter of 2007. While New York’s numbers continue to increase, the rate of increase is lower than the national average which is a 23 percent increase over the fourth quarter and a 112 percent increase over the first quarter of 2007.
“Unfortunately, we are not surprised to see increases in the numbers reported this quarter,” said Richard H. Neiman, Superintendent of Banks for New York. “The Banking Department considers the situation in New York to be very serious as the overall foreclosure numbers continue to be significantly higher than prior periods and they disclose that certain counties within the state are being disproportionately impacted by the mortgage crisis, signaling a continuing need for intervention.”
“Although foreclosure activity in New York was up significantly in the first quarter, the state’s foreclosure rate continues to register well below the national average and lower than most other states,” said Rick Sharga, Vice President of Marketing for RealtyTrac. “Still, the Banking Department’s in-depth evaluation of RealtyTrac’s numbers certainly demonstrates there are some foreclosure hot spots in the state.”
The New York State Banking Department analyzed the RealtyTrac data to concentrate on one-to-four family homes and to identify communities most at risk. This analysis shows that foreclosure filings for one-to-four family homes increased at a higher rate than the overall data. In the first quarter of 2008, the increase over the fourth quarter of 2007 was approximately 18 percent and over the first quarter of 2007 was approximately 48 percent. Foreclosure filings in New York represent one in every 256 owner occupied households, or one in every 167 owner occupied households with a mortgage. The difference in ratios between one-to-four family homes and total households reflects the large rental market unique to New York.
Higher foreclosures of one-to-four family homes are geographically concentrated in New York, with approximately 80 percent of the total occurring in 10 counties. Queens and Brooklyn accounted for approximately 32 percent and Long Island accounted for approximately 24 percent.
More than 70 percent of foreclosure filings in the state were Lis Pendens, which is usually the first filing in the foreclosure process. Lis Pendens often represent the number of borrowers who are at the start of a process that takes an estimated 13 months in New York. Counties hardest hit by Lis Pendens filings are Queens, Bronx and Brooklyn, as well as Suffolk, Nassau, Monroe, Westchester and Staten Island.
“The large number of borrowers still entering the foreclosure process is a clear indicator that we are not near the end of this crisis. As adjustable rate mortgages reset over the next 18 months, the number of families affected will continue to increase,” said Neiman. “The Banking Department has been working on addressing this crisis for over a year now and we intend to maintain that focus on assisting homeowners currently in trouble, as well as identifying and implementing plans to avoid a similar crisis in the future.”
In addition to leading the multi-agency Halt Abusive Lending Transactions (HALT) Task Force, which brings industry, consumer groups and government agencies together, the Banking Department has been active in various ways:
Licensing – New York is one of the first states to implement authorization for mortgage loan originators using a national licensing system that includes fingerprinting, background checks and educational requirements;
Enforcement – created a dedicated Mortgage Fraud Unit to investigate reports of fraudulent practices, and educate law enforcement and the financial sector in identifying, investigating and prosecuting mortgage fraud;
Community Outreach – partnered with state legislators in coordinating Operation Protect Your Home forums to bring borrowers, servicers, and counselors together in an effort to identify ways to avoid foreclosures;
Multi-state Efforts with Servicers – participates in the State Foreclosure Prevention Working Group, a multi-state task force, which comprises state bank supervisors attorneys general working with mortgage loan servicers to assess their efforts and to reduce the number of unnecessary foreclosures;
Counseling and Legal Aid Services – will be assisting in the distribution of $25 million in grants and aid to non-profit agencies s providing counseling, mediation, legal representation and support for borrowers facing default or foreclosure; and
Legislation – participated in the development of proposed state legislation to assist current borrowers and to prevent future crises.
TheNew York State Banking Department is the regulator for all state-chartered banking institutions, virtually all of the United States offices of international banking institutions, all of the State’s mortgage brokers, mortgage bankers, check cashers, money transmitters and budget planners. The aggregate assets of the depository institutions supervised by the Banking Department are more than $1.8 trillion.
In addition to regulating banking institutions, the Banking Department is active in informing and educating all New Yorkers on banking matters. To contact the Banking Department, please call 1-877-BANK-NYS or visit our Web site at www.banking.state.ny.us.
RealtyTrac® is the leading online marketplace for foreclosure properties. Founded in 1996, RealtyTrac publishes the largest and most comprehensive national database of pre-foreclosure, foreclosure, For Sale By Owner, resale and new construction properties, with more than 1 million properties across the country, property reports, productivity tools and extensive professional resources. RealtyTrac is the foreclosure data provider to MSN Real Estate, Yahoo! Real Estate and The Wall Street Journal’s Real Estate Journal. More information is available at www.realtytrac.com.