Study: Nearly half of LI's nonprime loans in default
Wantagh, N.Y. - Thursday, April 29, 2010. Lisa Leibrock is selling her Wantagh home after not being able to modify her mortgage. Credit: David Pokress/David Pokress
Even amid talk of slowing foreclosures, flattening home prices and a recovering economy, about half of Long Island's nearly 61,000 high-cost mortgages are in trouble.
According to a new study released Thursday by the Federal Reserve Bank of New York, nearly 40 percent of the region's nonprime loans are in default or foreclosure, or have become bank-owned.
Another 10 percent of those nonprime loans are not distressed, but still at risk, as they now are worth more than the homes themselves, making them potentially more susceptible to future default, the study found.
The study, which looked at the Island's home-loan picture as of February, showed no signs that the trouble in the region's housing market has abated. And the region is in far deeper distress than New York State overall, the New York Fed said.
Marianne Garvin, who heads the Community Development Corp. of Long Island, a private not-for-profit involved in housing, community development and economic development, said she worries the data may predict a second spike in foreclosures. Said Garvin: "The question is what can we do proactively to try to correct this and bring the Island back to a healthier, more sustainable place?"
The Fed's research only looked at subprime loans and those slightly less risky nonprime loans, called alt-A, loans and did not study prime, or conventional, loans. Garvin noted that foreclosures and negative equity are problems in that realm as well.
The Fed used a "distressed mortgage ratio" to study the number of nonprime loans in default or foreclosure per 1,000 housing units. Suffolk County's ratio reached 27.4 - ranking it 21st in the country. Nassau County's ratio stood at 20.7 - ranking it 44th.
Those ratios were far above New York State's 9.2, and even the nation as a whole, which stood at 10.4.
Showing that little has changed since Newsday last analyzed the region's foreclosure picture earlier this year, the Fed indicated that much of the mortgage troubles on Long Island are concentrated in particular communities and neighborhoods.
The Fed found that half of the nonprime borrowers in default or foreclosure live in just 22 of the region's 221 ZIP codes. And more than half of the borrowers who aren't in trouble yet, but have negative equity, are in those same 22 neighborhoods.
The problem, by community
The number of nonprime distressed mortgages per 1,000 housing units
11798 - Wyandanch - 100.71429
11717 - Brentwood - 100.01526
11575 - Roosevelt - 93.81898
11950 - Mastic - 87.45432
11722 - Central Islip - 84.61942
11553 - Uniondale - 81.17588
11951 - Mastic Beach - 74.37838
11967 - Shirley - 66.394
11550 - Hempstead - 58.6516
11763 - Medford - 57.37476
11520 - Freeport - 48.73436
11003 - Elmont - 46.25614
11590 - Westbury - 44.74514
11726 - Copiague - 43.85223
11706 - Bay Shore - 43.73905
11510 - Baldwin - 43.43516
11580 - Valley Stream - 37.11524
11784 - Selden - 36.54035
11701 - Amityville - 35.4569
11703 - North Babylon - 34.89583
11729 - Deer Park - 34.08155
11776 - Port Jefferson Station - 32.50607
Source: Federal Reserve Bank of New York
