Quarterly foreclosure activity drops on LI

Foreclosure activity on Long Island slowed down in the first three months of this year, the biggest year-over-year drop since the mortgage crisis began, new data show.

The number of homes that went into the foreclosure process, got auction notices or were repossessed fell 28 percent from the same period last year and 19 percent compared to the previous quarter, said RealtyTrac, which monitors foreclosures. That's 2,363 properties, compared to 3,272 a year earlier and 2,905 in the previous quarter, the report said.

Nationwide, foreclosure-related filings were sent to 681,153 homes in the first quarter, a 27 percent drop from a year earlier and the biggest decrease in three years, RealtyTrac said. It was a 15 percent drop from the previous quarter, data show.

It's not clear what's going on, even to Long Island attorneys and homeowner advocates on the front lines. Last year, RealtyTrac and other foreclosure experts predicted a big jump for the first quarter after scandals over lenders' foreclosure practices led to temporary holds on cases, investigations and changes in court procedures to protect homeowners' rights.

The monthly foreclosure prevention clinics run by the Nassau County Bar Association have been "overrun" by borrowers, about 60 compared to 40 a year ago, said Gale Berg, the bar's director of pro bono activities.

But she has noticed fewer mandatory conferences, the first step in the court-overseen foreclosure process. She believes lenders' attorneys have been unwilling to sign statements swearing they've checked details of each case, a step that the state's chief judge instituted last year after employees for three major lenders said they signed thousands of foreclosure documents monthly without checking the accuracy.

"I don't think the banks are going after people as quickly as they did last year," Berg said.

Some borrowers' advocates believe the mortgage industry is being more cautious. Wednesday, federal regulators handed penalties to major bank mortgage servicers over "unsafe and unsound" practices in foreclosures and loan processing.

At the Cullen and Dykman law firm, which has a branch in Garden City and handles cases for several big banks, partner Christopher Palmer thinks fewer borrowers are defaulting, partly due to a massive wave of refinancing based on record-low interest rates. "It could be the beginning of an improved outlook on the economy," Palmer said.

At Touro College's law center, which has been working with the Suffolk County Bar Association to advise borrowers, about 10 borrowers come in weekly, compared to 60 a year ago, said Tom Maligno, director of public interest at the Central Islip center.

"We believe that some of the reduction is because banks are negotiating with people before they file foreclosure on the homeowner," he said. "We're concerned about the results when people talk to banks without legal advice."

RealtyTrac chief executive James J. Saccacio predicted the slower pace of foreclosure work won't last as lenders and loan services work their way through the backlog of cases.