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The ups and downs of new LI foreclosure filings

A house is marked with a foreclosure sign.

A house is marked with a foreclosure sign. Credit: AP

The foreclosure process was started on 574 Long Island homeowners last month, a 26 percent increase from April but far from the higher monthly norm set before scandals over lenders' foreclosure practices, a new report said.

According to RealtyTrac, new cases dropped 32 percent from a year earlier, when 844 homeowners were sent into the state's foreclosure courts.

After the subprime loan market collapsed in fall 2007, it was the monthly norm for lenders to file against 1,000-plus Long Islanders. But the trend crashed in September when workers for major lenders admitted to signing thousands of foreclosure-related documents monthly without checking for accuracy.

Overall filings on Long Island in May -- new cases, foreclosure sale notices and lender repossessions -- jumped 21 percent from April but dropped 52 percent from a year earlier, the report said.

Nationwide, new cases in May fell 7 percent from April, to 58,797, the lowest since December 2006 and down 39 percent from a year earlier, RealtyTrac said. The difference between the local increase and the national decrease is evidence that lenders are unevenly pushing through cases as they overhaul documentation practices and determine if the local markets can bear more foreclosure listings.

But the drops "mask the true face" of the ongoing crisis, said RealtyTrac chief executive James J. Saccacio.

The inventory of bank-owned properties, known as REOs or real-estate-owned, grew in the past two months even as the pace of repossession slowed, he said. "That points to continued weak demand from buyers, making it tough for lenders to unload their REO inventory," Saccacio said. "Even at a significantly lower level than a year ago, the new supply of REOs exceeds the amount being sold each month."

But real estate broker David Guzzetta, who specializes in selling Suffolk foreclosures, said his inventory has fallen from about 50 a year ago to 30 due to the banks' "robo-signing" scandal. He hasn't seen a change in the sales pace from last year and even two years ago.

"I don't feel like I'm sitting on my stuff," said the owner of American Way Real Estate. "It doesn't matter what neighborhood, it doesn't matter what condition. If it's priced right for the condition and the neighborhood, then it goes."

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