Sales of LI homes in foreclosure drop

Real estate broker Steven Pagano says banks are

Real estate broker Steven Pagano says banks are organizing the release of foreclosed properties. (May 16, 2012) (Credit: Heather Walsh)

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Sales of Long Island homes that were in the foreclosure process dropped sharply in the first quarter compared to the same period last year, according to a report scheduled to be released Thursday.

Nassau County saw a 32 percent decline in sales of homes in foreclosure -- ranging from those that have received notices of default, to those already repossessed by lenders -- while Suffolk County had a decline of 34 percent, according to data provider RealtyTrac.

However, this winter's lull in foreclosure sales appears to be ending, said John Fitzgerald, president of Realty Connect USA in Hauppauge. The first quarter was "quiet," he said, but within the last month activity has picked up.

In a break from past practices, banks are now spending money to fix up properties for sale, Fitzgerald said. "They'll even put in new kitchens and bathrooms, depending on the particular house and what it needs," he said.

According to RealtyTrac, the average foreclosed home sold for nearly $300,000 in Nassau County, a 9.6 percent decline from the same period last year. In Suffolk County the average foreclosed home fetched $239,501, a 9.5 percent increase.

RealtyTrac's findings follow a CoreLogic report Tuesday showing the Island's foreclosure rate rose in March: Nearly 6.7 percent of homes with outstanding mortgages were in foreclosure, 1 percentage point more than in March 2011.

The first quarter's decline in foreclosure sales could demonstrate the delayed impact of last year's lull in new foreclosure filings, local brokers said. The so-called robo-signing scandal prompted banks to hold off on new foreclosures last year. However, major lenders struck a $25-billion settlement with state and federal authorities earlier this year, which is expected to lead to more foreclosures.

In the first quarter it took lenders in New York 1,056 days to repossess a home, dating from the "lis pendens," or notification to the homeowner that the foreclosure process is beginning, according to RealtyTrac. That's a 14 percent increase compared to the same period last year, and the longest delay in the nation.

Banks are starting to request more opinions about the value of foreclosed homes, and those homes are likely to hit the market within three to six months, said Steven Pagano of Pagano Properties in Huntington Station.

"What the banks are trying to do is just organize the way they want to release these properties to the public," he said. "The process is taking a little longer than expected."

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