New York has longest foreclosure time in nation

It took an average of 986 days to foreclose on a home in New York State in the third quarter -- a national record, RealtyTrac said in a report to be released Thursday.

The growing time frame for foreclosure, up from 966 days in the second quarter, has taken a toll on borrowers and on property values. Homeowners' arrears, lender fees and penalties grow by the month, digging a deeper hole for people battling to keep their homes.

And the glut of properties tied up in court -- 20,858 cases on the Island as of last month -- threatens to depress housing prices for an extended period, as foreclosed properties enter the market at cut-rate prices.

In Holbrook, real estate broker Jim McIntosh said the glut is a reason his three-bedroom condo listing hasn't gotten a serious bite at $237,000, which he said was about $50,000 lower than competitive prices.

"There's going to be so many houses on the market," he said. "You're going to have a lot of homes under $250,000."

New York's average foreclosure time is a result of negotiations between lenders and borrowers on loans, the time consumed by a judicial system of foreclosure, and scandals over lenders' sloppy documentation.

Foreclosure cases are usually put on hold as borrowers try to get lenders to lower monthly payments, a years-long effort.

Also, many other states allow lenders to take back homes without going to court. In New York, lenders must sue and get a judge's ruling. Adding to the time: In 2008, New York mandated settlement conferences between the parties, a last-ditch rescue that has morphed into many meetings and delays.

"Not one of us thought it would take this long," said Paul Lewis, chief of staff for the state's top administrative judge. "Cases in New York get more scrutiny than anywhere else, and I don't think it's a bad thing. I don't think we should be quick to take someone's home."

Third-quarter data from RealtyTrac show 128 Island properties were repossessed, a 57-percent drop from the same quarter a year earlier, the result of the documentation scandals. The 1,907 new cases filed was a 29-percent drop from the same period last year, data show.

But the pace of filings picked up from the second quarter as lenders recovered from the foreclosure scandals. New cases rose 8.7 percent from quarter to quarter and repossessions by 66 percent, data show.

The new cases and court logjam could buy time for restaurant manager Christopher Wong, who has been trying to save his Elmont home since 2008, but the lenders on his first and second mortgages don't agree on what to do.

On Tuesday, he left State Supreme Court in Mineola after another settlement conference with instructions to apply again for a loan modification."I'm going to give it another shot," he said. "If it doesn't work out, I'm going to go to court and say, 'Come take it.' "