LI foreclosure sales dive in 2nd quarter
The number of foreclosure sales plummeted by 49 percent in Suffolk County and 32 percent in Nassau County during the second quarter, compared to the same period in 2011, according to a report due to be released Thursday.
The decline is largely driven by how difficult and time-consuming it has become for banks to seize homes, according to Daren Blomquist, a vice president with RealtyTrac, the foreclosure data firm that compiled the report.
Alternatives to foreclosure include short sales -- where a home is sold for less than its outstanding mortgage balance -- as well as loan modifications and refinancings, he said.
"Foreclosure has become much more difficult for lenders to navigate," Blomquist said. "That is, I think, forcing lenders to consider alternatives to foreclosure."
Five major mortgage lenders reached a $25-billion accord with federal and state agencies earlier this year, settling allegations they foreclosed on homes without proper documentation.
Since that accord, said Carol Yopp, program manager with the Long Island Housing Partnership, "the banks are trying to work with these people, rather than letting it go to a foreclosure sale."
Some banks have been paying incentives to homeowners who agree to short sales, in amounts ranging from $2,500 to $25,000, said Michael Kenduck, owner of Cruse Real Estate in Seaford.
The five lenders who signed the $25-billion accord provided $10.6 billion in consumer relief from March 1 to June 30, with $8.7 billion in the form of short sales, according to a report released Wednesday from the official monitoring the settlement.
The accord requires the five banks to provide around $20 billion of relief by reducing loan balances for struggling borrowers and refinancing loans for customers whose homes are worth less than the value of their mortgages.
The report said Bank of America is lagging behind its peers in meeting its obligations under the settlement. Unlike its competitors, Bank of America did not modify any first-lien mortgages to reduce the amount of money the borrower owed, and it also did not complete any refinancings by June 30, according to the report.
However, Bank of America did allow $4.8 billion of short sales, the most of the five banks.
Bank of America spokesman Dan Frahm called the report an "early snapshot" and said the bank has made significant progress since June 30. The bank expects to meet all of its required targets in the first year, he said. -- With Reuters