Foreclosure activity declines on LI

A foreclosed home stands boarded up in Islip. The 423... — A foreclosed home stands boarded up in Islip. The 423 documents filed for Nassau and Suffolk homes last month represent a 50 percent drop from a year earlier. (Feb. 9, 2012) Credit: Getty

By TOM INCANTALUPOtom.incantalupo@newsday.comFebruary 16, 2012

Foreclosure activity on Long Island fell last month from December and from a year earlier, but once again experts termed the declines temporary due to legal and paperwork logjams.

A total of 423 foreclosure-related documents -- including default notices, auction schedulings and notices of bank repossessions -- were filed in January in Nassau and Suffolk counties, a drop of about 20 percent from December and about 50 percent from a year earlier, according to the California data company RealtyTrac.

Nationally, filings in January rose by almost 3 percent from December, to 210,941, said RealtyTrac, and fell by only 19.3 percent from a year earlier.

Hempstead attorney Karen Ferrare, who represents homeowners in foreclosure cases, attributed the more dramatic drop locally to judges in New York scrutinizing foreclosure-related documents more closely before approving them, after disclosures of widespread "robo-signing" of documents by some mortgage servicers. "The judges are just more up-to-date and more diligent in making sure no one loses their homes due to improper foreclosure filings," she said.

Experts at RealtyTrac expect a surge in foreclosures this year as courts catch up with the backlog and mortgage servicers redo robo-signed paperwork. "We continue to see signs on a local and regional level that the frozen-up foreclosure process is beginning to thaw," Brandon Moore, chief executive of RealtyTrac, said in a statement, noting that foreclosure activity increased year over year for the first time in more than 12 months in Florida, Illinois, Indiana and Pennsylvania.

In the long term, said RealtyTrac, a drop in foreclosures seems likely from a settlement announced last week between federal authorities and 49 state governments under which the five major mortgage servicers agreed to provide $25 billion to reimburse victims of robo signing and also to reduce loan principals, refinance at lower interest rates and provide legal services and counseling for millions of families struggling to keep their homes.

Another local attorney representing homeowners, Keith Lederman of Garden City, says the robo-signing episode has left lenders more willing to work with homeowners rather than foreclose. "A lot of these lenders and their attorneys are opting for modifications and other solutions rather than going to court, having learned how difficult it can be to pursue a legal foreclosure," he said.

One in every 624 U.S. housing units received a foreclosure filing during January, RealtyTrac said, compared with one in 2,045 in Nassau and one in 2,938 in Suffolk, indicating that, while Long Island has a number of foreclosure "hot spots," the foreclosure rate for the Island as a whole is below that of the nation as a whole.