New York Banking Department and RealtyTrac® Comment on Second Quarter 2008 New York Foreclosure Filings
New York State Continues to Be Less Impacted Than Other States;
Certain New York Counties Disproportionately Affected by Foreclosure Filings
July 31, 2008
New York, N.Y.: The New York State Banking Department and RealtyTrac® commented on the report published by RealtyTrac last week, reflecting the results of their nationwide quarterly review for the period ending June 30, 2008. The report notes that foreclosure statistics nationally are continuing to increase quarter over quarter and even more dramatically year over year. New York State ranked 30th in terms of foreclosure rate, or one in every 493 households compared to the national average of one in every 171 households.
According to RealtyTrac there were 16,025 foreclosure filings for properties in New York during the second quarter of 2008. This represents an increase of 11 percent compared to the first quarter of 2008, and 62 percent compared to the second quarter of 2007. While New York’s numbers continue to increase, the rate of increase is lower than the national average which is a 14 percent increase over the first quarter and a 121 percent increase over the second quarter of 2007.
“While New York is not as hard hit as other states, the foreclosure numbers are indicative of a very serious situation,” said Richard H. Neiman, Superintendent of Banks for New York. “New York’s initiatives in addressing this crisis highlight the need for multiple, aggressive efforts across a broad range of issues, from pre-foreclosure to the treatment of bank-owned properties and abandoned homes. New York has brought together the diverse stakeholders and service providers that are needed to develop lasting solutions, including bank regulators, housing finance agencies, community and church groups, and the lending industry. However, a problem as complex as the mortgage crisis is beyond the authority or resources of any single state. We therefore continue to advocate for constructive engagement with the federal government to resolve issues impacting the national housing market. “
“The second quarter was the eighth consecutive quarter in which we’ve seen increasing foreclosure activity in New York,” said Rick Sharga, Vice President of Marketing for RealtyTrac. “We are pleased to provide to the Banking Department to help in their analysis and understanding of the magnitude of the problem.”
The New York State Banking Department analyzed the RealtyTrac data to identify communities most at risk. Higher foreclosures are geographically concentrated in New York City and Long Island, with approximately 77 percent of the total occurring in 10 counties. Queens and Brooklyn accounted for approximately 29 percent and Long Island accounted for approximately 21 percent. Foreclosure filings in New York represent one in every 246 owner occupied households, or one in every 161 owner occupied households with a mortgage, based on the Census Bureau’s 2006 American Community Survey estimates for New York.
Approximately 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, Brooklyn, Suffolk, Nassau, Monroe, Westchester and Staten Island.
New York State Initiatives
Under the leadership of Governor David A. Paterson, New York has taken a leadership role in providing a coordinated response that has already served as a national model. The Governor’s HALT Task Force to Halt Abusive Lending Transactions is the primary umbrella for uniting the work of all state agencies that relate to the mortgage market. A copy of the most recent report from the HALT Task Force is available on the Banking Department Web site at http://www.banking.state.ny.us/pr080511.pdf.
The following six categories reflect the breadth of the state’s response to date.
Counseling and Legal Services. Stemming the tide of foreclosures involves considerable one-on-one intervention with troubled homeowners, including credit counseling and legal services and HALT member agencies have provided funding and administrative services for substantial grant programs. The Division of Housing and Community Renewal (DHCR) is administering a $25 million grant program through the State budget and expects to announce initial awards in August. DHCR has also been the lead on the Urban Homeownership Assistance Program (UHAP), having awarded $388,000 in 2007 with an additional $975,000 announced for 2008. The Banking Department has a $2 million grant program in process for consumer credit counseling and legal services. The funds were recouped from prior settlements for predatory practices. The initial eight awards amounting to $790,000 for New York City were announced in July, with awards statewide to follow later this summer
Outreach and Loan Modifications. The HALT agencies have also engaged in direct outreach to affected consumers through two comprehensive campaigns: the HALT Summits and Operation Protect Your Home (OPYH). HALT Summits are day-long events that bring together community groups, industry, government, and academia to identify regional problems and develop solutions. OPYH events give homeowners the unique opportunity to meet face-to-face with their lender or servicer to arrange a loan modification or other workout agreement. Three HALT Summits and seven OPYH events have been held in 2007 and 2008 throughout the state.
The Banking Department has been participating in the Multi-State Foreclosure Prevention Working Group, which is composed of several state attorneys general and state bank supervisors. Data received indicates that industry efforts are failing to keep pace with increasing delinquency rates. The most recent study is available on the Banking Department’s Web site at http://www.banking.state.ny.us/pr080422.pdf.
- Refinancing and Mortgage Programs. The State of New York Mortgage Agency (SONYMA) has developed new affordable mortgage products. The introduction of the forty-year fixed rate mortgage was a milestone, and provides first-time homebuyers with the flexibility of a lower monthly payment and the security of a fixed monthly payment. This is a responsible alternative to the “exotic” products that flooded the market in recent years with artificially low initial payments that quickly reset and became unaffordable. SONYMA also began to offer refinancing opportunities, through the Keep the Dream program.
- Legislation. New York has been particularly innovative in the area of legislation, with the Banking Department and the HALT agencies providing input and technical expertise into the drafting of the Governor’s subprime bill. This legislation is the most comprehensive mortgage reform in the nation, and includes measures to help existing borrowers and prevent unnecessary foreclosures as well as to help prevent similar crises in the future.
- Neighborhood Stabilization. The Affordable Housing Corporation has a $2 million pilot grant program for the Housing Partnership Development Corp. to purchase and renovate at least 50 foreclosed housing units in New York City. The goal with this neighborhood stabilization initiative is to return foreclosed properties to productive use to prevent the destabilization of communities.
- Enforcement. The Banking Department has taken aggressive enforcement action through the creation of a dedicated Mortgage Fraud Unit, which is actively working with law enforcement to uncover abusive lending practices and fraud. Further, New York was one of the first states to launch the new National Mortgage Licensing System (NMLS) in January of 2008, designed to curb mortgage fraud through review of fingerprints, background checks, and an education requirement for the tens of thousands of individual loan originators throughout New York.
The New 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.
Top ten counties in New York for foreclosure filings in the second quarter of 2008
Second quarter 2008 foreclosure filings alphabetically by county
Second quarter 2008 foreclosure filings by percentage of filings