Foreclosure filings on LI are down for July

Foreclosure-related filings on Long Island fell in July and shriveled across the nation to a 44-month low, RealtyTrac said Thursday.

The Island's numbers had been on the rise for two months, but then last month fewer new cases and auction notices led to a 4 percent drop compared to June and 23 percent compared to a year earlier. The Island had 682 new foreclosure cases last month, down from 720 in June and 808 a year earlier, the report said.

July didn't break any records on the Island, but the decrease would have been bigger if lenders hadn't taken back more homes last month -- 40 compared to 15 in June, according to the data, which list everything from initial foreclosure notices to bank repossessions.

Nationwide, July foreclosure activity fell 4 percent from June and 35 percent from a year ago to the lowest level since November 2007, shortly after the subprime loan market imploded.

It's hard to pinpoint one main cause for last month's pace of activity, because so many factors make up the foreclosure picture, from the Obama administration's penalties against lenders to customer service improvements made by big banks.

But this year several distressed borrowers on Long Island reported suddenly getting letters and offers from their lenders, breakthroughs after years of negotiating or of being told they don't qualify.

"A lot of homeowners have been getting letters from banks making them offers, like 'If you want to sell, I'll give you X dollars,' or they negotiate all of a sudden," said Gale Berg, who runs foreclosure prevention for the Nassau County Bar Association. "I don't know what's precipitating it."

Also, she's seeing more foreclosure cases withdrawn by attorneys for lenders and loan servicers, she said. That's a win for the homeowners; if the lender wants to repossess the house, it would have to start the legal process from scratch.

"I didn't see it at all a year ago," Berg said. "Now I'm seeing one or two a week."

The slowdown, triggered by scandals last fall over the industry's foreclosure practices, has now taken on a "life of its own," said RealtyTrac chief James J. Saccacio.

He believes processing delays have combined with a "smorgasbord" of homeowner rescue programs to stave off foreclosure -- but not forever.

"Unfortunately," he said, "the falloff in foreclosures is not based on a robust recovery in the housing market but on short-term interventions and delays that will extend the current housing market woes into 2012 and beyond."