The National Association of Realtors said home sales increased in...

The National Association of Realtors said home sales increased in January, but the number was buoyed by foreclosures and cash-only sales, indicating speculators may have entered the market. (April 2008) Credit: Getty Images

The foreclosure picture on Long Island shows two trends: fewer new cases filed but more homes taken back by lenders compared to a year ago, according to RealtyTrac's July report.

More than 800 homeowners joined the ranks of borrowers in the foreclosure process last month, but that was a drop of 44.7 percent from July a year ago and 14 percent from this past June, said the firm, which markets foreclosures.

Lenders took back 117 homes last month, an 86 percent increase from July a year ago but a 36.8 percent drop from this past June, the report said.

The numbers came yesterday just before the Obama administration announced $3 billion more in mortgage and job help for the unemployed. About $2 billion of that is reserved for 17 states and Washington, D.C., places where the unemployment rate has been at or above the national average for the past 12 months; New York is not one of them.

Out of the remaining $1 billion, out-of-work borrowers who once had good payment histories can apply for interest-free loans to make payments for up to 24 months through programs that will be run by states and nonprofits.

Federal officials said details and requirements will come after they speak to local governments and loan servicers.

Despite a growing influx of programs and money aimed at saving homes, Edward Skehan of East Islip said he hasn't felt the effects. Now a divorced father of three, he's been current on payments and passed loan modification trials with lower payments, he said.

But several months ago, his lenders said he was not qualified for a permanent modification, and now owes $22,000 to make up for the lowered payments. He says they told him he should sell his home of 16 years.

"Now they have me in an escrow shortage of $22,000, which I cannot pay," Skehan said.

But Uniondale attorney Richard Harrison, who represents about six major lenders, said the numbers show that lenders have adopted a more realistic tactic with homeowners in trouble: try solutions before going to the foreclosure arena.

In New York State, which has one of the nation's longest foreclosure processes, lenders and investors can find themselves tied up in legal wrangling and mandated settlement conferences for two or three years.

"I think the message is clear not that they've got to exhaust modification efforts," Harrison said. "It's simpler to exhaust the efforts up front rather than spend the money to commence a foreclosure and then still have to go through the efforts."

On the Island, the trends with troubled homeowners reflect patterns nationwide, where foreclosure-type filings in July grew 10 percent from July a year ago but fell 4 percent from this past June, RealtyTrac said.

"Declines in new default notices, which were down on a year-over-year basis for the sixth straight month in July, have been offset by near-record levels of bank repossessions, which increased on a year-over-year basis for the eighth straight month," said James J. Saccacio, RealtyTrac's chief executive.

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