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August 6, 2009

Brooklyn Monthly Foreclosures

There were 47 new foreclosures in July for Brooklyn, which has 873,000 households total, according to PropertyShark's monthly foreclosure report. This is a 27 percent increase from the 37 foreclosures in June, but a 25 percent decrease from the 63 foreclosures in the same month last year. Regardless of that year-over-year number, it's hard not to look at that upward-trending line and not be just a little bit scared. The report includes data from all five boroughs: notably, Queens is the foreclosure leader, with 199 new foreclosures in July, or 63 percent of all foreclosures in New York City, while Manhattan saw only four new foreclosures. Overall, citywide, foreclosures are down 7.6 percent from June, and down 6.7 percent from July 2008.
Data from PropertyShark

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What is the cumulative number of foreclosures from,say, the beginning of 2008 and what is the total amount of housing stock in Brooklyn??? Looking for the rates. I suspect they mirror what credit card default rates are...very low single digit. They too were somewhat nonexistent almost in the 2000-2007 period.

Posted by: daveinbedstuy at August 6, 2009 9:10 AM

these numbers are not bad at all however it is being held down by some NYS program if I remember correctly giving a moratorium. I wonder when that expires. Here is a real scary story from Deutche Bank
http://www.reuters.com/article/businessNews/idUSTRE5745JP20090805?feedType=RSS&feedName=businessNews

Posted by: brickoven at August 6, 2009 9:26 AM

On a related (?) note, this is from bankrate.com site:

"The big mortgage news of the week concerned the abrupt failure of Taylor, Bean & Whitaker, a top-15 lender overall, and the third-biggest originator of FHA-insured loans. Taylor, Bean & Whitaker's swift demise Wednesday afternoon stranded possibly thousands of would-be borrowers. The lucky ones were early in the process, and had applied for loans and were waiting for approval. The unlucky customers had been approved for loans and were waiting for them to close. All must start over and submit a new application with another lender."

Have any of the big mortgage lenders been above board over the past few years? Disgusting.

Posted by: MacD at August 6, 2009 9:29 AM

I find it almost ludicrous that the Deutsche bank guy can predict what 2011 will look like.

Posted by: daveinbedstuy at August 6, 2009 9:31 AM

yo MacD check out the MACD on IYR

Posted by: brickoven at August 6, 2009 9:33 AM

MacD, not so sure I see what in that comment would imply that the lender was not "above board". The company failed, but nothing in the comment implies they defrauded anybody or did anything else unethical. When a company fails, there is always collateral damage and some people who relied on this company for loans will have to get them elsewhere - that doesn't imply anything untoward by the company.

Posted by: bkhabitant at August 6, 2009 9:38 AM

dave dont you work in finance? why would you find it hard to ludicrous? Its called econometrics, dont you use models?

Posted by: brickoven at August 6, 2009 9:39 AM

BOLL is a prettier technical pic, BO

Posted by: daveinbedstuy at August 6, 2009 9:39 AM

Need to wait & see if the Wall St bankers will spend their massive bonuses on real estate and if they'll pay juicy prices. The massive bonus is one thing NYC has that other cities dont have.

Posted by: more4less at August 6, 2009 9:40 AM

Well, bk, how about this one, from the same source:

"Taylor, Bean & Whitaker's problems surfaced Tuesday afternoon, when the federal Department of Housing and Urban Development announced that it had suspended the lender from underwriting mortgages insured by the Federal Housing Administration.

HUD said that it had suspended Taylor, Bean because the lender "failed to submit a required annual financial report and misrepresented that there were no unresolved issues with its independent auditor even though the auditor ceased its financial examination after discovering certain irregular transactions that raised concerns of fraud."

The next day, Taylor, Bean & Whitaker announced that it was ceasing all lending operations immediately. The Wall Street Journal reported that the company's CEO sent an e-mail to employees, saying that the company was ceasing operations and that all nonessential employees would be laid off that day."

'Nuf said.

Posted by: MacD at August 6, 2009 9:41 AM

anyway I never give stock tips here but some advice to all, if yu own any REITs sell them right now!

Posted by: brickoven at August 6, 2009 9:49 AM

let me ask a really dumb question...

when a house is foreclosed, that means the bank acquires it right? is that only if you still have a mortgage to pay on it? do you walk away scott free but lose everything you put into the house, or do you have to still pay on it or something?

also do they foreclose on houses if youve already paid the full mortgage but cant pay the taxes? also are co-ops and condos ever foreclosed on?

sorry im asking such punky brewsterish questions, but i never really fully understood the concept.

*rob*

Posted by: PitbullNYC at August 6, 2009 9:52 AM

none of these econometric models have been very predictive in the past eight years, neither on the way up or the way dome. Don't you remember that Long Term Capital which imploded many years ago based all their investing on econometric models.

I hope you were just being facetious.

Posted by: daveinbedstuy at August 6, 2009 9:52 AM

Dave people have made billions using these models. They just have to have the right assumptions. Look at John Paulson, How do you pick stocks for clients?

Posted by: brickoven at August 6, 2009 9:59 AM

MacD, no argument from me anymore. You're right - enough said based on your second post.

Posted by: bkhabitant at August 6, 2009 10:07 AM

On fundamentals, BO.

Posted by: daveinbedstuy at August 6, 2009 10:15 AM

Okay, I'm not a finance person, but based at the raw numbers in Brooklyn--not the trend--it just doesn't seem that scary. 47 foreclosures in the whole borough this month? Neighborhoods are not being blighted, and these properties will likely be snatched up and inhabited ASAP.

Certainly not great for the homeowners and their tenants, but we're still talking about a small number of people.

Posted by: tinarina at August 6, 2009 10:17 AM

Exactly, tinarina. these properties don't sit like in some abandoned suburban enclave. they are bought upo upon foreclosure. Yes, very bad for the homeowners but these properties seem to have very litttle effect on the housing market as a whole. Complete towns are being devestated price-wise in parts of middle America because of the foreclosures in some parts...CA, NV and FL being the main problems

Posted by: daveinbedstuy at August 6, 2009 10:21 AM

tinarina these numbers are great however they are most likely to quadruple from here. There was a state moratorium holding them down and the delinquincies are spiking in Brooklyn. There was a Crains article about it last week

Posted by: brickoven at August 6, 2009 10:25 AM

There is next to zero risk for an institution that only lends FHA single family loans. TB,&W didn't sink from making 'bad' loans.

Posted by: lincolnlimestone at August 6, 2009 10:32 AM

Even at 200 per month I suspect the impact will be in handful of neighborhoods, like ENY and Bushwick and Canarsie. Not great, but not a disaster. I have friends and family in Cleveland--there are foreclosures on every block, even in the nicest parts of town...and not enough buyers.

Posted by: tinarina at August 6, 2009 10:32 AM

"numbers are great however they are most likely to quadruple from here." -- why do you say that....why quadruple not triple or tenfold. Are you just throwing something out there or do you have some facts and figures.

Posted by: Petebklyn at August 6, 2009 10:34 AM

I think it's important to take into account just where in Brooklyn these foreclosures are happening when trying to plot any real estate trends. I'm not a financial professional, but I do think that this real estate cycle is remarkable in that "brownstone Brooklyn" is not going to precisely follow the overall trending pattern for Brooklyn, just as New York City is not following the patterns of overly-speculated cities like Miami, Las Vegas, etc.

I guess what I'm saying is that I think that with this cycle, a few Brooklyn neighborhoods will have entered the value perimeter that used to encircle only Manhattan.

Posted by: WonTon at August 6, 2009 10:35 AM

Pete that is based on a Crains article last week about the deliquincies in what they called Northern Brooklyn i think. The map had red dots all over what I describe as the fringe areas of Brooklyn.

Posted by: brickoven at August 6, 2009 10:41 AM

I guess what I'm saying is that I think that with this cycle, a few Brooklyn neighborhoods will have entered the value perimeter that used to encircle only Manhattan.

Posted by: WonTon at August 6, 2009 10:35 AM

This has been my thinking for awhile. WonTon has expressed it more succinctly and elegantly.

Posted by: daveinbedstuy at August 6, 2009 10:54 AM

Dave you should read the Crains article youre hood seems to have a lot of people falling behind.

Posted by: brickoven at August 6, 2009 11:01 AM

In the fringe areas, certainly, BO. Not in prime Bed Stuy, or Stuyvesant Heights. You can go one block east and it's as if you were in a different worlds, in many ways.

Posted by: daveinbedstuy at August 6, 2009 11:06 AM

Dave, thanks, but that's too much of a compliment for my terrible English writing....

Posted by: WonTon at August 6, 2009 11:09 AM

WonTon, Yale + Princeton would like you to be more proud and less modest

Posted by: more4less at August 6, 2009 11:13 AM

WonTon, you coming to Ellis bar tonight??? m4l can vouch for me that I don't bite or get grabby!!!!

Posted by: daveinbedstuy at August 6, 2009 11:24 AM

Dave you crack me up! Even though you are wrong on RE

Posted by: brickoven at August 6, 2009 11:26 AM

Bs term of the day "Prime Bed Stuy"
LOL ahahahahha

Posted by: cornerbodega at August 6, 2009 11:26 AM

Seems I've been right on real estate for over 24 years, BO.

Posted by: daveinbedstuy at August 6, 2009 11:29 AM

Sigh, yes I know m4l, but old habits die hard.

Dave, I have no worries, I can't imagine you'd want to either bite or grab me.

I'll try to come by tonight. I'm not much of a drinker. m4l are you coming?

Posted by: WonTon at August 6, 2009 11:30 AM

Agree with Tinarina. Not great, but not a disaster that's going to bring all of Brooklyn or New York down with it. Actually, all the short sales and foreclosures that have been on the market for over a year in Bushwick are clearing out. Quite a few closings since March, very few residential houses on the market (as opposed to condos or commercial buildings).

The foreclosures have been mostly concentrated in the East of Brooklyn in neighborhoods such as Bushwick and East New York. Bed Stuy, there are a few, but not so much. You're behind, Corner.

Posted by: mopar at August 6, 2009 3:30 PM

BTW at least in NY when a foreclosure takes place the bank doesn't own property immediately. The bank has to go to court in a fairly complicated proceedure and basically calls the loan and the property which is the security for the loan is sold(on the court house steps) to pay the loan. The bank(or whomever holds the paper on the house) can bid the amount on the paper but if any one bids higher they will own the home pay off the loan and the balance if any(after fees) is turned over to the homeowner. Of course in this market people don't bid more than the loan. Sometimes the holder of the mortgage won't bid its paper but will be happy to take less and not own the house ever....(also in NY the owner of the house has a right to redeem by paying everything within a period of time which I don't know off hand)....

Posted by: smeyer418 at August 7, 2009 9:42 PM

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August 6, 2009

Brooklyn Monthly Foreclosures

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