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Mortgage delinquency rate rises

Foreclosure

Foreclosure Photo Credit: iStock

In June, one out of every 10 mortgage borrowers on Long Island was at least 90 days late, but only one out of every 20 was in the foreclosure process, according to CoreLogic.

The Island’s delinquency rate in June was just shy of 10 percent, compared to 9.8 percent a year earlier, the report said. The foreclosure rate was 5.9 percent, unchanged from May and up from 4.4 percent a year earlier.

The delinquency rate is higher because lenders are not starting foreclosure files on everyone who’s 90 days late. In the past, that used to be an automatic trigger for foreclosure.

But lenders have been swamped and are trying to negotiate lower monthly payments for distressed homeowners before starting the lengthy, expensive road to foreclose, said Long Island real estate attorneys and foreclosure experts. Also, the Obama administration has warned the mortgage industry against working on dual tracks by foreclosing and negotiating with the homeowner at the same time.

On Long Island, both the delinquency and foreclosure rates have been slowly but steadily climbing since January 2009, the earliest figures from CoreLogic. Back then, the delinquency rate was 5.5 percent and the foreclosure rate 2.4 percent, the report said.

The data provider tracks only existing mortgages, which paints a picture of what’s happening just among home-loan borrowers.

Other data providers, such as RealtyTrac, also release foreclosure rates, but their rates factor in all households, including renters and homeowners who have already paid off their loans. Such foreclosure rates show the depth of the mortgage crisis in a different way by shedding light on how much a community has been affected.

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