Foreclosures in Metro NY

Discussion in 'Politics' started by chasinfla, Sep 22, 2002.

  1. I thought this might be of interest to some:

    SACRAMENTO, Calif., Sep 22, 2002 (BUSINESS WIRE) --, a California based distressed property advisory firm and publisher of pre-foreclosure data in five major U.S. metropolitan markets (Arizona, California, Illinois, New York and New Jersey), has been researching causes for an extraordinary surge in foreclosures in the New York City metro area.

    "We've been looking at this for months," said's president, Alexis McGee, "ever since the New York Times reported a delinquency rate in March of three times the national average for federally insured mortgages in New York."

    Ms. McGee said that low and moderate-income homeowners in southeastern Queens and central Brooklyn were showing the highest default rates. "A combination of social and economic issues are driving this disturbing trend," Ms. McGee said. She pointed to a New York City unemployment rate of 7.9% (over 25% higher than the national average of 5.9%), a fallout from the economic losses of 9/11, and predatory lending in minority neighborhoods as major contributing factors.

    "Some people say New York City is a hot housing market. They point to the 21% increase in home prices there over the last 12 months. What they forget is that prices were coming off an artificial bottom after 9/11." In fact, says Ms. McGee, "prices are just slightly above their pre-9/11 levels. Until that recovery happened, troubled homeowners had a hard time finding enough equity to refinance out of delinquent mortgages. They were upside down in their property."

    Ms. McGee said that, in many cases, the only way to avoid foreclosure was for defaulted borrowers to sell their homes and save at least some equity for a new start. "Unfortunately," she added, "even though as much as eighteen months might elapse between the filing of a Lis Pendens action by a lender, and the Sheriff's Auction, too many troubled homeowners are slow to accept the fact that the home must be sold. By the time they do, it's too late to conduct an orderly sale through a Realtor."

    Ms. McGee said that the pre-foreclosure information published by her firm enables professional distressed property investors to locate homeowners facing foreclosure, and by purchasing the property for cash and closing the sale quickly, prevent the homeowner from losing everything in a sale on the courthouse steps.

    "The investor gets some of the equity for a profit, and the seller gets the rest," Ms. McGee said. "Our service to investors provides the defaulted borrower with one last exit before going over the edge of the cliff."