Brooklyn’s Long Foreclosure Process: Help or Hindrance?


Via Bloomberg News:

New York’s Kings County, also known as Brooklyn, wears the crown as the U.S. community where it takes longest to foreclose on a delinquent homeowner. Lenders took an average of 1,187 days — more than three years — to repossess a home in Kings County during the last three months of 2011, according to data compiled by Bloomberg. The protracted process led to just 32 fourth-quarter foreclosure completions in a borough where more than 27,000 homes got delinquency notices last year, New York Department of Financial Services data show. The 10 U.S. counties with the longest foreclosure timelines were all in New York and New Jersey. While delays give some struggling homeowners time to renegotiate loan terms and limit supply on the market, they eventually depress housing values by postponing the inevitable for borrowers who can’t pay their mortgages or maintain their properties, said Jonathan Miller, president of New York appraiser Miller Samuel Inc. “You aren’t doing anybody any favors in the long run,” he said in a telephone interview. “In markets where it takes longer for the foreclosure process, it takes longer to recover.”

As we have been tracking regularly, New York City has seemed relatively immune to the foreclosure morass that has plagued the rest of the country. This article begs many questions. First: Will we not actually have a clear view of “the market” until foreclosures jump through all the necessary hoops? Second: To what extent does the protracted foreclosure process in Brooklyn actually lead to homeowners keeping their homes? Third: Does New York’s foreclosure system need to be reformed? We don’t know the answers to any of these questions. And this doesn’t even touch commercial properties, as far as we know.
Brooklyn Shelters Homeowners With Longest Foreclosures [Bloomberg]
PropertyShark: Decline in Foreclosures Continues [Brownstoner]
Photo by dominic bartolini

6 Comment

  • fractalogical

    Perhaps the long foreclosure process enables more short sales (also a lengthy process) to take place? Not sure if that’s any better for homeowners in terms of their credit though.

  • cp

    i’ve seen properties go in and out of lis pendens for years. is this a curtesy to the home owner? an f u to the bank(s)?

  • cp

    i’ve seen properties go in and out of lis pendens for years. is this a curtesy to the home owner? an f u to the bank(s)?

  • My own anecdotal survey in my neighborhood and surrounding working class areas, shows that most people who end up foreclosing on residential, owner-occupied properties do so because foreclosure is a symptom of the country’s economic woes, ie: lost jobs. They didn’t buy megamansions in pricy nabes, they bought homes in neighborhoods they could afford when they had jobs. When those jobs disappeared, and it turned out to be impossible to get another, foreclosure is inevitable.

    Refinancing, and modification only helped IF YOU HAD A JOB. The government and bank programs never address that, and consequently, these much ballihooed programs really didn’t serve the groups that needed it most. Most people I know would have gladly paid their mortgage, as well as added fines and penalties, in order to keep their homes, if only they were able to get another decent job.

    These homes were the hard won effort of years of saving and scrimping, in order to own a home for their families, they weren’t looking to make out big in the real estate market, or become some kind of mega, multiple property mogul. People obviously survive worse things than this, but losing your home, after doing all the right things, really hurts.

  • My own anecdotal survey in my neighborhood and surrounding working class areas, shows that most people who end up foreclosing on residential, owner-occupied properties do so because foreclosure is a symptom of the country’s economic woes, ie: lost jobs. They didn’t buy megamansions in pricy nabes, they bought homes in neighborhoods they could afford when they had jobs. When those jobs disappeared, and it turned out to be impossible to get another, foreclosure is inevitable.

    Refinancing, and modification only helped IF YOU HAD A JOB. The government and bank programs never address that, and consequently, these much ballihooed programs really didn’t serve the groups that needed it most. Most people I know would have gladly paid their mortgage, as well as added fines and penalties, in order to keep their homes, if only they were able to get another decent job.

    These homes were the hard won effort of years of saving and scrimping, in order to own a home for their families, they weren’t looking to make out big in the real estate market, or become some kind of mega, multiple property mogul. People obviously survive worse things than this, but losing your home, after doing all the right things, really hurts.

  • Is the last 3 months of 2011 indicative of the process as a whole? I know banks had recently slowed down due to MERS issues; perhaps that quarter (or even year) is an outlier? In any event, if 27,000 notices were sent, probably safe to bet about 5-10,000 were actually in foreclosure (using this data as a benchmark: http://www.crgraphs.com/2011/10/mortgage-delinquency-graphs.html ), and with a process that long it’s easy to see short sales, mods and simple repayment bringing the number down significantly. Or, there should be a huge bulge in foreclosures hitting us fairly soon, since things really hit the fan in 2009 -