For the second straight month, new foreclosure cases on Long Island went up, this time by 25 percent from May to June, the latest data show.
Lenders started foreclosure against 720 homeowners, but that's far from the 940 new cases from the same month a year earlier, said RealtyTrac, an online market for foreclosures. From April to May, the number of new cases grew 26 percent, data show.
The month-to-month increases indicate lenders may be ramping back up after last fall's scandals over foreclosure practices slowed new cases considerably. After employees for three major lenders said they signed papers without checking their accuracy, New York State courts began requiring lenders' attorneys to check the paperwork, while state judges challenged lenders on whether they owned the mortgage.
"Banks have for the most part gotten their arms around those problems over the past year and they're in a position to foreclose on loans properly," said Christopher Palmer, whose Garden City and Manhattan law firm of Cullen and Dykman represents big lenders.
RealtyTrac data show the scandals were a sort of boon to struggling homeowners for the first half of this year. On the Island, 4,338 properties got some sort of foreclosure-related filing, down from 41 percent for the same period last year and 28 percent from the last half of last year, the report said.
Nationally, the scandals may have delayed filing of about 1 million foreclosure-related notices from this year to 2012 and beyond, RealtyTrac estimated.
RealtyTrac chief James J. Saccacio said the crisis won't end soon because of high unemployment and falling home prices: "Processing and procedural delays are pushing foreclosures further and further out. . . . This casts an ominous shadow over the housing market, where recovery is unlikely to happen until the current and forthcoming inventory of distressed properties can be whittled down to a manageable number."
Michael Ferruggia, a Hauppauge-based attorney who represents distressed borrowers, said many wait too long to get help. If they decide to sell the house, interested buyers often fail to qualify for loans, he said, or the appraisals are too high. These issues will linger: "These are two problems that we as real estate practitioners have very, very little influence over."