Almost one out of every 10 Long Islanders with mortgages was at least three months late on payments, but only one out of every 20 was tied up in the foreclosure process, newly released figures for September show.
The 9.76 percent delinquency rate is up from 8.32 percent a year ago and almost double what it was less than two years ago, said CoreLogic, a California firm that tracks mortgages.
The foreclosure rate, which counts court cases and homes auctioned off, was 4.82 percent in September, up from 3.65 percent a year ago, data show.
The gap between the delinquency and foreclosure rates shows many delinquent homeowners have not been immediately taken to foreclosure court by lenders. Lending industry experts and borrowers' attorneys cited various causes for the gap, from homeowners working things out to lenders being too swamped. "There are some properties that are redeemed, said attorney Chris Palmer of the Cullen and Dykman law firm, which represents lenders. "People come and purchase them so they don't go into foreclosure - or people work it out with the bank."
Another reason for delays in starting foreclosure: Lenders have the right to start foreclosure proceedings after homeowners are 90 days late, but under New York State law they must first send a foreclosure warning that gives them 90 days more to pay or get help.
Lenders also have been reluctant to go the foreclosure route, especially in New York State, where the process can take two years or more, said Michael Smith, president of the New York Bankers Association. By taking the foreclosure route, Smith and others said, lenders often end up paying on property maintenance, taxes and repairs.
Experts say this gap between delinquency and foreclosure rates is part of the "shadow inventory" - distressed properties that could end up on the market in the next two years.
Another report to be released Thursday shows fewer foreclosures on the market here were purchased during the third quarter of the year. There were 537 Long Island foreclosures sold from July to September, or about 9 percent of all home sales here, compared to 730 homes a year ago, or about 10.3 percent of all sales, said RealtyTrac, a California firm that tracks foreclosures.