Pre-foreclosure Notices Helping New York State Target Outreach to Most At-risk Homeowners
Banking Department’s New Database of Mortgage Servicer Notifications is One of Few in the Nation
June 10, 2010
New York, N.Y.: The New York State Banking Department today announced that more than 57,256 90-day pre-foreclosure notices were sent to New York homeowners who have fallen behind on their mortgage payments since Feb. 13, 2010. The five counties with the highest total number of pre-foreclosure filings on owner-occupied, 1-to-4 family properties in the state are Suffolk with 8,293, Queens with 6,267, Nassau with 5,755 filings, Brooklyn with 4,485 and Erie with 2,917. A complete list of the ten counties with the greatest number of pre-foreclosure filings is available at http://www.banking.state.ny.us/pff100610.pdf.
The data issued today was based on filings received by the Banking Department from almost 200 mortgage loan servicers between Feb. 13, 2010 and May 31, 2010, in accordance with Governor David A. Paterson’s 2009 Mortgage Foreclosure Law. The new law requires all servicers of New York residential mortgages to provide the Banking Department with key information from the 90-day pre-foreclosure notices sent to homeowners. These notices, which have been required by New York Banking Law for high-cost, subprime and non-traditional mortgages since September 2008, notify the homeowners of their default status and outline steps they can take to avoid foreclosure, including working with a local, non-profit housing counselor. The 2009 reforms amended the law to require pre-foreclosure notices on all residential mortgages as of January 2010.
“With the new information gained from these pre-foreclosure notices, we are now able to identify geographic areas of the most at-risk homeowners before they fall into the foreclosure process. An important part of resolving this mortgage crisis is getting homeowners the help that they desperately need before they fall too far behind to recover,” said Richard H. Neiman, Superintendent of Banks for New York State. “New York State is again serving as a leader in foreclosure prevention. This information-gathering will set an example for other states and even ultimately for a national database of mortgage statistics.”
Under the 2009 Mortgage Foreclosure Law, the Banking Department now has the ability to share important information with housing counseling agencies, as appropriate, in an effort to direct foreclosure prevention services to borrowers at risk of foreclosure. Currently, the Department has shared information with nine counseling agencies covering 38 counties. Additional counties will begin receiving data within the coming weeks.
Other highlights from the data include:
- The five counties with the highest share of pre-foreclosure filings in the state are: Suffolk (14.5%); Queens (10.9%); Nassau (10.1%); Brooklyn (7.8%) and Erie (5.1%).
- The five counties with the highest percent of pre-foreclosure filings per mortgage are: Orange (3.03%); Sullivan (3.00%); Bronx (3.00%), Suffolk (2.94%) and Queens (2.81%).
- More than half, or 30,182, of the pre-foreclosure notices were sent on mortgages or refinances originated between 2005 and 2007.
- Throughout the state, more than 31% of the pre-foreclosure notices were sent on loan amounts under $100,000, which suggests that economic issues are at the root of current defaults as such loan amounts are significantly less than home values.
- More than half, or 31,044, of the pre-foreclosure notices sent were on mortgages that were less than 60 days delinquent.
“We are well past the point of this being a subprime or predatory loan crisis,” said Neiman. “The recession and job losses, as well as the overall decline of the housing market, have led to the current situation of responsible homeowners who may have had a good loan being overwhelmed by temporary economic hardships.”
The Banking Department encourages all homeowners who may have received a letter to contact their servicer or local non-profit housing counselor for more information and assistance. Listings of government-approved housing counselors by location can be found at http://nysdhcr.gov/Programs/ForeclosurePrevention/CounselListing.htm.
More information from the Banking Department’s pre-foreclosure filing database is available at http://www.banking.state.ny.us/pff100610.pdf. The Banking Department plans to complete more detailed analysis of delinquency trends and actual foreclosure filings as more data is collected on these 90-day pre-foreclosure notices.
Brian Lawlor, Commissioner of the New York State Division of Housing and Community Renewal (DHCR) and President/CEO of nyhomes said, “Pre-foreclosure notices include contact information for non-profit housing counselors, lenders, and servicers—data that is extremely valuable and critical to helping people take steps to save their homes. Since this crisis began, we’ve been urging homeowners to reach out to DHCR-funded qualified housing counselors at the earliest sign of a problem and to beware of scam artists who charge a fee and often make the situation worse. Now with this new provision of the law, the state can help homeowners and professional housing counselors make a direct connection and put a plan in place. I want to thank Superintendent Neiman for developing this important tool and partnering with DHCR to help lessen the impact of the foreclosure crisis in New York.”
“The New York State legislature and Banking Department have provided substantial leadership on the issue of foreclosure prevention by collecting this valuable data and enabling us to reach out to homeowners in mortgage distress before they fall into foreclosure. Since beginning operations in 2008, the Center for New York City Neighborhoods (CNYCN) and its network has been able to reach over 8,000 homeowners and we are confident that we can provide reliable, free support to homeowners in New York City,” said Michael Hickey, Executive Director of CNYCN.
“We welcome the opportunity to reach out to homeowners in an effort to resolve issues before an expensive foreclosure process begins. In the Capital Region we are inviting owners to attend one of our monthly Foreclosure Clinics to meet one-on-one with experienced attorneys and housing counselors to review options. Homeowners can get well-informed advice at no charge, and do not need to pay a mortgage ‘rescue’ company that may end up scamming them by taking their money and providing no relief,” said Susan Cotner, Executive Director of the Affordable Housing Partnership.
To date the Banking Department has shared information with the following non-profit counseling agencies: Affordable Housing Partnership on behalf of the HomeSave Coalition; Center for New York City Neighborhoods; The Housing Council; Housing Assistance Program of Essex County (HAPEC); Metro Interfaith Housing Management Corp.; Utica Neighborhood Housing Services; Opportunities for Chenango Inc.; Community Development Corporation (CDC) of Long Island; Greenpath Inc.
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 $2.4 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.dfs.ny.gov.