Sharp drop in LI foreclosures in November

Lenders and loan servicers "hit the pause button" on many foreclosures last month, with fewer homes here repossessed compared to October and a year ago, a new report said.

Data provider RealtyTrac said 73 local properties went to lenders last month, a 39 percent drop from a year ago and a 50 percent from October.

That's a sharp turnaround from the yearlong pattern in which lenders sped up efforts to repossess properties in older cases, but it reflects fallout from the recent "robo-signing" scandal. After employees of three major lenders said they signed thousands of foreclosure papers monthly without checking information, New York State courts in October slowed down the pace of repossessions by requiring lenders' attorneys to submit sworn documents saying they tried to verify details in the cases.

Slowdown predicted

For the past few weeks some attorneys for borrowers in foreclosure have been predicting this slowdown.

"At this point, every lawyer in the nation is on the lookout for a robo-signer or a defective document," said Barry Lites, a Hauppauge attorney who counsels borrowers.

Overall last month, filings to start foreclosure cases, auction off homes and repossess them fell 2 percent from a year ago on Long Island, RealtyTrac said. They rose 6 percent from October, due in large part to a doubling of the number of auction notices, figures show. Auction notices are required in New York State but don't herald trends because auctions are often rescheduled or canceled.

Nationwide, November foreclosure-related filings sank 14 percent from a year ago and 21 percent from the previous month, RealtyTrac said. Repossessions decreased 12 percent from a year ago and 28 percent from October.

Robo-signing controversy

"While part of the decrease can be attributed to a seasonal drop of 7 to 10 percent . . . fallout from the foreclosure robo-signing controversy forced lenders and servicers to hit the pause button on many foreclosures while they scrambled to revamp their internal procedures and revise or resubmit questionable paperwork," said James J. Saccacio, RealtyTrac's chief executive.

Nassau real estate investor Chacko Varghese expects the number of homes at auction to increase after the holidays but not as much as in previous years due to the controversies.

Most Tuesdays, he goes to auctions held in State Supreme Court in Mineola, and this week there were only two homes up for bid, far below the seasonal norm of dozens of properties since the real estate boom went bust in 2007.