Foreclosures in New York
For almost a year, foreclosures in New York had been increasing. This trend was reversed this third quarter ending in September when filings for foreclosure in New York fell by 10 percent. By a new law, people in New York can work extra 90 days to keep their homes. However, similar laws implemented in other states showed an initial drop in foreclosures but subsequently there were sharp increases. So, this could just mean delaying foreclosures and nothing more than that. This was opined by Rick Sharga. Sharga is vice president of marketing at RealtyTrac Inc., a foreclosure listing service. RealtyTrac. Inc. compiled foreclosure figures released by the state Banking Department. Under the new law, which was enacted in New York on 1st September, lenders wanting to start foreclosure proceedings have to wait for 90 days, which gives the indebted homeowners time to think of possible solutions to their debt problems.
In the second quarter there were 16.025 foreclosures in New York. This figure has gone down to 14,477 in the third quarter that was closed on 30th September. This decline has been attributed to the new law.
However, State Banking Superintendent, Richard Neiman, is cautious about passing judgment too soon. According to Neiman, the figures for the third quarter do not tell the true story. The foreclosures figures for the next quarter are expected to be a better indicator of the true picture. The figures for the fourth quarter ending in December will include foreclosures, which have been filed after the new waiting period of 90 days. Many homeowners are just using this grace period to delay filing for foreclosure. In other states there have been sharp increases in foreclosures immediately after the waiting period. In Massuchusetts, for example, after an initial decline in foreclosure rates after implementation of the new law, there was an increase to 465 percent after the expiry of the initial period.
In California, lenders have to contact borrowers a minimum of 30 days before filing for default. In North Carolina borrowers get an extra 45 days. Whether such laws will effectively stem the tide of foreclosures remains to be seen. In most states, New York included, there are no regulations under which lenders have to restructure the loans.
These new steps are only directed at dealing with the symptoms, and not addressed at the cause of the problem, opine experts such as Sharga and others.
