Long Island Home Foreclosure Filings Drop 4% in 2010

The number of homes on Long Island hit with some type of foreclosure filing dipped 4 percent last year as state courts ramped up demands on lenders to prove ownership of mortgages and have their paperwork in order, a new report says.

In year-end data from RealtyTrac released Thursday, the 13,105 properties represented the first such decrease since before the subprime mortgage market imploded in fall 2007.

The Island's December and fourth-quarter numbers show an overall decrease in the filings - new cases, auction notices and repossession of homes - when compared to the previous month, quarter and year ago. For example, foreclosure activity last month sank 29 percent from a year ago and 26 percent from November.

But the drop does not mean the worst is over, foreclosure experts said.

State Supreme Court Justice Dana Winslow in Mineola senses no long-term relief as borrowers make one point to him: They've lost jobs or income.

"We are not seeing that Main Street is improving with real jobs, with money becoming available to pay the mortgage," he said Wednesday. "Until we do, there won't be any changes in the foreclosure numbers that are realistic."

Instead, 2010's drop came as lenders tried modifying more loans to avoid New York State's lengthy foreclosure process.

Then in the fall, lenders were slammed by major investigations over foreclosure practices when employees at three major lenders said they signed thousands of foreclosure papers monthly without checking their accuracy.

Those lenders declared brief moratoriums on foreclosure cases. And New York State's head judge in October ordered lenders' attorneys to file sworn statements saying they took steps to confirm the details in each case, leading to delays and postponements on scores of auctions on the Island.

Data requested from RealtyTrac show the "robo-signing" scandal seems to be generating two trends: Filings drop overall in the 26 states with judicial processes for foreclosures and go back up in states with none.

Late last month, Merrick homeowner Claudio Jovel learned a state judge granted him and his wife, Sandra, more time to fight foreclosure on their Merrick home of 19 years because of errors in the lender's paperwork. "In the interest of justice," read the order from Justice Thomas A. Adams in Mineola.

Before robo-signing scandals, judges often did not grant extra time to borrowers who didn't respond to foreclosure claims, as in Jovel's case, said his attorney, Keith Lederman of Garden City. "The change is palpable," Lederman said.

Nationwide last year, a record 2.9 million properties had filings, up 2 percent from 2009 and 23 percent from 2008, RealtyTrac said. Numbers would have been higher if not for a fourth-quarter drop due to the robo-signing scandal.

"Many of the foreclosure proceedings that were stopped in late 2010 - which we estimate may be as high as a quarter million - will likely be restarted and add to the numbers in early 2011," said RealtyTrac chief James J. Saccacio.

Jovel, 40, hopes judges' tougher stance on lenders will rescue him. Delinquent since 2008, he's been loading UPS trucks part-time after his car upholsterer employer cut his hours and his wife lost her job sewing beads on bridal gowns.

"When I got the foreclosure letter, I got heartbroken," he said. "You work so hard to get a house."

The number of homes on Long Island hit with some type of foreclosure filing dipped 4 percent last year as state courts ramped up demands on lenders to prove ownership of mortgages and have their paperwork in order, a new report says.

In year-end data from RealtyTrac released Thursday, the 13,105 properties represented the first such decrease since before the subprime mortgage market imploded in fall 2007.

The Island's December and fourth-quarter numbers show an overall decrease in the filings - new cases, auction notices and repossession of homes - when compared to the previous month, quarter and year ago. For example, foreclosure activity last month sank 29 percent from a year ago and 26 percent from November.

But the drop does not mean the worst is over, foreclosure experts said.

State Supreme Court Justice Dana Winslow in Mineola senses no long-term relief as borrowers make one point to him: They've lost jobs or income.

"We are not seeing that Main Street is improving with real jobs, with money becoming available to pay the mortgage," he said Wednesday. "Until we do, there won't be any changes in the foreclosure numbers that are realistic."

Instead, 2010's drop came as lenders tried modifying more loans to avoid New York State's lengthy foreclosure process.

Then in the fall, lenders were slammed by major investigations over foreclosure practices when employees at three major lenders said they signed thousands of foreclosure papers monthly without checking their accuracy.

Those lenders declared brief moratoriums on foreclosure cases. And New York State's head judge in October ordered lenders' attorneys to file sworn statements saying they took steps to confirm the details in each case, leading to delays and postponements on scores of auctions on the Island.

Data requested from RealtyTrac show the "robo-signing" scandal seems to be generating two trends: Filings drop overall in the 26 states with judicial processes for foreclosures and go back up in states with none.

Late last month, Merrick homeowner Claudio Jovel learned a state judge granted him and his wife, Sandra, more time to fight foreclosure on their Merrick home of 19 years because of errors in the lender's paperwork. "In the interest of justice," read the order from Justice Thomas A. Adams in Mineola.

Before robo-signing scandals, judges often did not grant extra time to borrowers who didn't respond to foreclosure claims, as in Jovel's case, said his attorney, Keith Lederman of Garden City. "The change is palpable," Lederman said.

Nationwide last year, a record 2.9 million properties had filings, up 2 percent from 2009 and 23 percent from 2008, RealtyTrac said. Numbers would have been higher if not for a fourth-quarter drop due to the robo-signing scandal.

"Many of the foreclosure proceedings that were stopped in late 2010 - which we estimate may be as high as a quarter million - will likely be restarted and add to the numbers in early 2011," said RealtyTrac chief James J. Saccacio.

Jovel, 40, hopes judges' tougher stance on lenders will rescue him. Delinquent since 2008, he's been loading UPS trucks part-time after his car upholsterer employer cut his hours and his wife lost her job sewing beads on bridal gowns.

"When I got the foreclosure letter, I got heartbroken," he said. "You work so hard to get a house."