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April 3, 2009

Brooklyn Foreclosures Drop Dramatically in First Quarter

While foreclosures city-wide were down slightly in the first quarter versus a year ago, they were down significantly in Brooklyn. According to PropertyShark, there were only 37 foreclosures in Brooklyn over the last three months, versus 140 in the first quarter of 2008 and 83 in the fourth quarter of 2008; Manhattan also saw a marked decline. You can check out a dynamic map of the Brooklyn properties here. If the same thing were happening in the Bronx and Queens, we might chalk it up to the government and bank programs, but that doesn't appear to be the case. So any ideas what could explain this trend in Brooklyn?

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I'm seeing more "short sales." I assume a short sale is not measured as a foreclosure, but essentially it is.

Posted by: daveinbedstuy at April 3, 2009 9:10 AM

So... buying a house for $800k in outer Queens *wasn't* a good idea?

Posted by: tybur6 at April 3, 2009 9:22 AM

I thought the banks had a grace period during the holidays where they were not going to foreclose on any home. Maybe that was a factor in this new data.

Posted by: NewYawker at April 3, 2009 9:28 AM

I mentioned this a few months ago and the What provided a link to the same story maybe 2 weeks ago or so but what has been happening is that banks are pulling back from foereclosing for two reasons. The primary reason is because then they have to come up with the additional taxes, etc, to the cities & towns. Many smaller towns see the banks as an ATM machine and levy huge fees on homes in foreclosure or unoccupied; so the banks just don't foreclose.

Secondly, I believe the banks are trying to package all the bad loans together to sell off en masse which would be far easier than dealing with them themselves. Both of these scenarios would have driven down the rate of foreclosure.

Posted by: daveinbedstuy at April 3, 2009 9:34 AM

"So any ideas what could explain this trend in Brooklyn?"

Very slow, cloggy foreclosure process. There's been a lis pendens on my block for about one or two years now. It doesn't show up on that map. Expedite the process like other states and foreclosures would skyrocket. Not a good way to measure the health of the NYC market. Not at all. It's a nice straw to grasp though.

Short sales, like dave alluded to above, is another plausible explanation.

***Bid half off peak comps***

Posted by: Brownstones Half Off at April 3, 2009 9:41 AM

I've been told by a couple lawyers that this opinion was important:

http://www.foreclosuredefenselawblog.com/2008/06/new-york-court.html

Posted by: tonewlots at April 3, 2009 9:41 AM

DIBS,
Agreed. What I don't understand though is why only in Brooklyn the foreclosures are down. Special treatment by banks?

Posted by: Gravis at April 3, 2009 9:48 AM

Folks we are in one big mess!!! I'm looking at unemployment as a leading indicator. So many people lost their jobs last month and this quarter. I think we better prepare for lies ahead.

U.S. Unemployment Rate Reaches 25-Year High of 8.5% (Update2)

http://www.bloomberg.com/apps/news?pid=20601087&sid=aV3T3USSyJy0&refer=home

April 3 (Bloomberg) -- The U.S. unemployment rate jumped in March to the highest level since 1983 as the economy lost 663,000 jobs, threatening to keep spending subdued for months and delay any recovery.

The jobless rate increased to 8.5 percent from 8.1 percent in February, a Labor Department report showed in Washington -- consistent with the forecasts of 79 economists surveyed by Bloomberg. Employers have cut a total of about 5.1 million posts since the recession began, the biggest slump in the postwar era.

The unemployment rate was 4.6% just six month ago. We live in interesting times but it's not the "interesting" you want.

One last thing-- The retards on TV are calling this the Greater Recession now! Oh Boy...

The What

Someday this war is gonna end..

Posted by: Return of The What at April 3, 2009 9:52 AM

"One last thing-- The retards on TV are calling this the Greater Recession now! Oh Boy..."

That would be a pretty strong confirmation that it is now over!!!!!! It'll hit the cover of Newsweek next week and we'll know we're on the way out of it!!!!!

Posted by: daveinbedstuy at April 3, 2009 9:57 AM

NPR this morning was discussing the unemployment rate, job losses and the recession. The woman interviewed predicted a continued (though slowed) downward trend in the economy until Q4 this year. And because unemployment is a trailing reflection of the economy, she said we should expect lob losses through the end of Q1 of 2010... where the unemployment/job losses will reach its peak. (Perhaps 10-12%)

The "good news" was that the decline has *slowed* though not stopped.

No matter how you slice it, 8.5% unemployment ain't too good. And since I have unemployed family members in wonderful industries like manufacturing... outsourcing to Mexico... it ain't so cheery.

Posted by: tybur6 at April 3, 2009 10:14 AM

A big portion of those newly unemployed stem from the fact that people who were laid of many months ago are just now filing for unemployment because their severance packages are ending.

You can't file until severance payments stop.

Posted by: TownhouseLady at April 3, 2009 10:39 AM

Think Dave is spot on @ 9:10 & 9:34.

I'm surely hoping he is with regard to 9:57 but I'm doubtful!

Posted by: TownhouseLady at April 3, 2009 10:41 AM

Part of the difference may reflect differences in the way that Kings County deals w/foreclosure filings, too.

From the Wall Street Journal:

Some Judges Stiffen Foreclosure Standards
By AMIR EFRATI
July 26, 2008; Page A3

A cadre of state-court judges scrutinizing foreclosure actions in a string of recent rulings have discovered flaws in documents that borrowers may be able to use to keep their homes. The judges, including a committee from the Kings County Supreme Court in Brooklyn, N.Y., are highlighting shortcuts taken by mortgage companies in court filings, which borrowers might be able to exploit when facing foreclosure. The rulings show the critical role that judges are beginning to play as foreclosures mount in the most severe housing crisis since the Great Depression. The recent decisions build upon widely circulated opinions issued last fall by federal judges in Ohio who found trusts that hold the mortgages regularly begin foreclosure proceedings before they obtain the legal right to do
so.

Judges in states including New Jersey, Florida and
Massachusetts have begun to dismiss many cases "without
prejudice," meaning the plaintiffs can fix the defects and
resume the process, but the ruling gives the homeowners more
time. Meanwhile, some bankruptcy courts, where creditors may
seek permission to foreclose if the debtor isn't keeping up with the bankruptcy plan, have issued standing orders requiring creditors to prove ownership of loans. Other state courts, including in Ohio and Pennsylvania, have begun requiring owners of loans who have filed foreclosure suits to try to negotiate settlements with borrowers to avoid foreclosure.

[...] About six judges from the supreme court in Brooklyn, the state's lowest court, which handles most of the New York City borough's foreclosure actions, have been digging into the problem and finding new issues that they can use to dismiss cases.

The work of the Brooklyn court -- which formed a committee to discuss foreclosures about five years ago, long before the housing crisis emerged -- looks prescient now as it has rejected dozens of foreclosure actions since the crisis began by identifying mistakes or suspicious information.[...]

Posted by: tonewlots at April 3, 2009 10:57 AM

Foreclosure creates opportunity:

http://www.nytimes.com/2009/04/03/us/03florida.html?_r=1&hp

Posted by: East New York at April 3, 2009 11:03 AM

Speaking from experience, you file when you're laid off. Severance is not a salary. Unless of course you're kept on salary while you're not going to work as part of the separation agreement.

Posted by: Johnny at April 3, 2009 11:08 AM

shit the bronx is fucked.

I wasnt able to receive unemployment until after they were done giving me my severance. It was spread out over 3 weeks.

Posted by: Santa at April 3, 2009 11:19 AM

Johnny, Did you get a lump sum payment then?

Posted by: TownhouseLady at April 3, 2009 11:21 AM

Yeah -- that's the key -- get a lump sum payment if you can. Of course, severance isn't "salary" based on work performed so there's no law about how it has to be paid. If the company has cash, they might be able to pay a lump sum. If they don't, then they can't.

If your severance is spread out and it's a relatively tiny amount, you might be able to get partial/reduced unemployment. But I'm not sure.

Posted by: tybur6 at April 3, 2009 11:31 AM

"banks are trying to package all the bad loans together to sell off en masse"

If true, it adds to what I said above that tracking foreclosures in NYC is a futile way to measure market health. Pure spin, like biggest sales. The worst is way ahead. Confidence is on life support. They need to pull the plug, let it die and resurrect. But they won't (mark-to-market suspension). That's why we're already in a depression. And it will be a greater depression for the US than in the 30's because our productivity sucks.

***Bid half off peak comps***

Posted by: Brownstones Half Off at April 3, 2009 11:52 AM

I don't know the reason for the drop but this is what I've seen:

*Lots of short sales in 2008, all of them purchased in 2005/2006. Not moving. Also a smattering of empty houses in limbo just sitting there unoccupied and not being marketed.

*Now, starting about a month ago, properties that have already been foreclosed on and are empty and owned by the banks, for sale for miniscule amounts: $250,000 and $370,000.
They are selling very quickly.

*Motions by the government, ACORN, and others to help renters and owners stay in their properties rather than being foreclosed on. Protests. Government promising to buy empty buildings and rehab them to "affordable" housing.

Posted by: mopar at April 3, 2009 12:03 PM

BHO - please, stop with the BS!

US worker productivity is, in-fact, at an all-time-high. Econ 101: productivity is measured in output-per-worker. The sad [to many of us] legacy of 3 decades of automation, IT, lay-offs & outsourcing is that it takes fewer workers to create more goods & services.

Even in this crunch, productivity keeps going up:

The U.S. Labor Department announced that U.S. worker productivity increased at a 3.2% annualized rate in Q4 2008 and at a 2.8% rate for all of 2008; the full-year rate was the nation's largest productivity increase since 2003. Each was better than Wall Street's consensus estimates of roughly 1.1% and 2.0%, respectively, according to a Bloomberg News survey.
[source: http://www.bloggingstocks.com/2009/02/06/ray-of-light-u-s-corporate-worker-productivity-continues-to-r/]

I'm not really sure why I'm bothering to post this, as the bear/moron/ROTW crowd only seem to see what they want to see, believe what they want to believe... that's why an article about dropping foreclosure rates is interpreted as BAD news & further validation of their twisted world view.

Enjoy!

Posted by: parkedslope at April 3, 2009 1:16 PM

"I'm not really sure why I'm bothering to post this, as the bear/moron/ROTW crowd only seem to see what they want to see, believe what they want to believe... that's why an article about dropping foreclosure rates is interpreted as BAD news & further validation of their twisted world view."

Twisted like this????

U.S. Unemployment Rate Reaches 25-Year High of 8.5% (Update2)

http://www.bloomberg.com/apps/news?pid=20601087&sid=aV3T3USSyJy0&refer=home

So that means productivity increases with less people on a job. OK I'm sorry I had to smoke some crack to see that POV...

The What

Someday this war is gonna end...

Posted by: Return of The What at April 3, 2009 1:41 PM

Yes, ROTW - and unemployment in NYC is now over 10%! Sorry to say, you are only helping make my point: productivity gains do not necessarily equate with a healthy economy. Nor do those gains always equate with a lousy economy either...
I know mixing apples-and-oranges is a popular strategy of yours, and again, I was simply saying that BHO was 100% wrong in his assertion that 'our productivity sucks.'
But I'll take your bait anyway: as for unemployment #'s, there is a real danger that eventually, too many people will lose their jobs and productivity will take a hit because demand will plummet. You may remember about 7 years ago when Greenspan was actually complaining that unemployment was too low - which meant workers had too much bargaining power & that was hurting - you guessed it - productivity.
The jury's out on just how NYC's current high unemployment will affect the housing market: I'd like to see some demographic break-down of the numbers - what kinds of jobs [white collar, skilled blue collar or unskilled labor] are being lost - because that will determine how much rents vs sales prices will fall.
And to the vulture buyers out there, I say: beware. Prices may come down, but easy-money mortgages are already hard to come-by; inflation may kick-in & that could actually buoy prices while diminishing the value of your savings; and there may be more owners out there than you think who have stable jobs, fixed mortgages & actually bought within their means.
But when all is said-and-done, may I remind you all that the report says foreclosures were DOWN in Brooklyn? And the map shows all but 2 foreclosures happening east of Flatbush - excluding most of the 'Brownstone Brooklyn' neighborhoods.

Posted by: parkedslope at April 3, 2009 2:47 PM

"The jury's out on just how NYC's current high unemployment will affect the housing market"

What????????????

"But when all is said-and-done, may I remind you all that the report says foreclosures were DOWN in Brooklyn? And the map shows all but 2 foreclosures happening east of Flatbush - excluding most of the 'Brownstone Brooklyn' neighborhoods."

You have about 7 months of life support left. This fall the wall of Jericho will fall down and the Mind Set of Greed and Delusion will be finished...

Team Bear have a great weekend and Team Bullsh*t suck balls...

The What

Someday this war is gonna end..

Posted by: Return of The What at April 3, 2009 3:54 PM

parkedsheep,

US Labor Department???!!! The agency that spins the unemployment numbers ("Ran out of benefits...Sorry, we don't count you.")? Are you serious?

Stop listening to the herdsmen and start thinking outside the box. We have consumed far more than we have produced [real goods]. Why do we have a skyrocketing deficit? Why was the national savings rate negative for the first time since the Great Depression? Where is our manufacturing base?

Beep beep beep...!!! Good morning, Vietnam!!!

http://www.safehaven.com/article-6651.htm

***Bid half off peak comps***

Posted by: Brownstones Half Off at April 3, 2009 4:15 PM

"And to the vulture buyers out there, I say: beware. Prices may come down, but easy-money mortgages are already hard to come-by; inflation may kick-in & that could actually buoy prices while diminishing the value of your savings; and there may be more owners out there than you think who have stable jobs, fixed mortgages & actually bought within their means."

parkedsheep - You are clueless. Bottoms stay flat, giving vultures (the ones who stay liquid and solvent) plenty of time to strike. Review the historical record. There was no rush during the 90's when times were relatively better. Yes, you have to do the math to account for interest rate spikes and inflation but all that can be outperformed with a high enough savings rate. There are more aquamen and aquawomen out there (you know, underwater - bloop, bloop, bloop...) than YOU think. This is an economic depression whether you want to realize it now or wait for your Department of Labor to tell you (like the year-late recession call).

And I didn't interpret the foreclosure numbers above as an indicator of a bad market. I said it was a bad indicator, period, for the reasons dave and I stated above.

***Bid half off peak comps***

Posted by: Brownstones Half Off at April 3, 2009 4:28 PM

Parkedslope, I think what you say makes a lot of sense and is certainly something to think about.

Posted by: mopar at April 3, 2009 5:12 PM

In a curious coincidence, Tad Friend's article about a California foreclosure broker in this week's New Yorker explains every question in this post and everything that is going on with foreclosed houses across the nation. In a delightful and entertaining and emotionally disturbing manner. I recommend it.

http://www.newyorker.com/reporting/2009/04/06/090406fa_fact_friend

Letter from California, “Cash for Keys,” The New Yorker, April 6, 2009, p. 34

Posted by: mopar at April 4, 2009 1:11 AM

It was Santa Claus. It would be pretty mean to foreclose on people during the winter months. To be honest as much as I hate these people for buying over their heads I still would not kick them into the street during the coldest part of the year. Spring is hear watch the for sale signs pop up like daisies in Spring.

Posted by: hannible at April 5, 2009 12:18 PM

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April 3, 2009

Brooklyn Foreclosures Drop Dramatically in First Quarter

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