Long Island foreclosures down in quarter up from '09

In the first three months of this year, 173 homes on Long Island were returned to lenders in foreclosures - 73 in Nassau and 100 in Suffolk, according to RealtyTrac, which collects foreclosure data.

That's a 23 percent drop from the 226 homes taken in the fourth quarter of last year, but a 174.6 percent jump from the 63 homes taken in the first quarter of 2009, data show.

Nationwide, 257,944 homes went to lenders, the highest quarterly figure since RealtyTrac began gathering data in 2005, the company said. The increase was 9 percent from the preceding quarter and 35 percent from the same quarter a year ago, data show.

Total foreclosure activity went up in 2010's first quarter, but the growth tilted toward bank-seized properties instead of new cases and auctions, RealtyTrac chief executive James J. Saccacio said.

He surmised that lenders were making headway on open foreclosure cases: "This subtle shift in the numbers . . . may be further evidence that lenders are starting to make a dent in the backlog of distressed inventory that has built up over the last year as foreclosure prevention programs and processing delays slowed down the normal foreclosure timeline."

Unlike home sales, which warm up along with the weather, foreclosures don't have seasonal cycles.

But the time it takes for a foreclosure to wrap up in New York State - up to two years - gives a sense of why many homes were taken by lenders this year.

Those Long Island homes belonged to borrowers who likely defaulted in 2008. That year the recession began here in June and Wall Street collapsed in September, leading to layoffs and delinquencies among prime borrowers. Before 2008, subprime borrowers took the brunt of the foreclosure crisis.

This year, options ran out for the borrowers who lost homes in the first quarter, from the federal homeowner rescue programs to the state-mandated 90-day, pre-foreclosure warnings and court-scheduled settlement conferences.

Programs to rescue homeowners have just started to push back against foreclosures, said Faith Schwartz, executive director of Hope Now, an alliance of mortgage industry players from nonprofits to lenders and federal mortgage insurers.

She said there's no balance yet between the pace of foreclosures and rescued homes.

But last month, about 150,000 loans were modified nationwide, Schwartz said, and "I anticipate that will keep going up."