New LI foreclosure cases up in April
A foreclosure sign is posted outside a house in Stockton, California. (Sept. 18, 2008) Credit: Bloomberg News
In contrast to a national downward trend, the number of newly launched Long Island foreclosure cases went up in April, according to RealtyTrac, an online market for foreclosures.
Lenders last month began the legal process of repossessing 1,280 homes on Long Island, a 3.5 percent increase from a year ago and a 10 percent increase over March.
The increase may be more a sign of stricter regulation than of a deteriorating economy.
Joan LaFemina, manager of homeowner services at the Community Development Corp. of Long Island, a nonprofit helping borrowers, said that at the beginning of the year, loan servicers were being more flexible and accepting alternative documentation - to verify income, for instance - and offering trial payment plans.
But recently local lenders have been requiring specific documentation for anyone seeking a mortgage modification. "If they're not able to verify income," LaFemina said, "they'll deny the modification."
The number of new cases in April fell in Nassau, to 446, a 16.9 percent drop from a year ago and a 4 percent increase from March. But the 834 Suffolk cases represented a 19.1 percent hike from April 2009 and a 13.5 percent increase over March. The volume of loans tends to be higher in Suffolk, experts said, because it has more younger and lower-income homeowners.
Still, the total for both counties was less than the 1,461 new cases in July 2009, the highest in the past two years.
Nationally, new cases in April tumbled 20.5 percent compared with a year ago and dipped 9.1 percent from March.
RealtyTrac chief executive James Saccacio said it was the first time in the five-year history of the firm's report that there was an annual decrease in overall U.S. foreclosure activity, which includes new cases. Foreclosure activity "has begun to plateau - but at a very high level that will not drop off in the near future," he said.
On Long Island, lenders took back 20 Suffolk homes and seven Nassau homes in April, RealtyTrac said, down significantly from a Long Island total of 97 a year ago but slightly higher than 25 repossessions in March.
The decrease in local repossessions also differed from the national figures: Bank repossessions nationwide hit a record monthly high. The total of 92,432 surpassed the previous peak in December 2009 of 92,182, RealtyTrac said.
Saccacio said repossessions were increasing even as default notices were dropping.
"We expect a similar pattern to continue for most of this year," he said, "with the overall numbers staying at a high level and ripples of activity hitting the various stages of the foreclosure process as lenders systematically work through the backlog of distressed properties."
