The New York State Banking Department has announced that more than 76,744 90-day pre-foreclosure notices were sent to New York homeowners who have fallen behind on their mortgage payments since May 31, 2010. A total of 134,000 pre-foreclosure notices have been sent since data collection began on Feb. 13, 2010.
On Aug. 6, 2010, the Banking Department launched an online system, making it easier for lenders, assignees and mortgage servicers to file information pertaining to pre-foreclosure notices with the Department. This, along with the addition of about 200 more mortgage loan servicers to the system, led to an increase in the volume of filings submitted to the Banking Department each week.
The four counties with the highest total number of pre-foreclosure filings on owner-occupied, one- to four-family properties in the state remained the same as in the last report issued on June 10, 2010. Suffolk County topped the list with cumulative total of 19,880 pre-foreclosure notices followed by Queens with 15,184, Nassau with 13,611, and Brooklyn with 11,037 from Feb. 13 to May 31, 2010. Westchester replaced Erie as the county with the fifth-highest cumulative total of 6,309 notices. A complete list of the 10 counties with the greatest number of pre-foreclosure notices is available here.
The data was based on filings received by the Banking Department from almost 400 mortgage loan servicers between Feb. 13, 2010 and Aug. 31, 2010, in accordance with Governor David A. Paterson’s 2009 Mortgage Foreclosure Law. The law requires all servicers of New York State residential mortgages to provide the Banking Department with key information from the notices, which must be sent to homeowners at least 90 days prior to a foreclosure filing.
The Banking Department, which has the ability to share important information from the notices for foreclosure prevention services, is now working with 10 non-profit housing counseling agencies throughout the state. These 10 housing agencies represent 38 of New York’s 62 counties and use the data to better target their services to those homeowners most at-risk, often working along with other area non-profits.
“The information that we gather from the pre-foreclosure notices allows the Banking Department and the counseling agencies that we work with to better identify and target areas of at-risk homeowners before they fall into the foreclosure process,” said Richard H. Neiman, Superintendent of Banks for New York State. “Homeowners are not only notified of the risks that they face, but also about the foreclosure prevention services that are available to them.”
These notices are part of broader efforts being made by New York State and the Banking Department to address foreclosure prevention issues in the state. On Friday, Oct. 1 new regulations went into effect that impose standards on the business practices of mortgage loan servicers and establishes new protections for homeowners. These rules, originally issued by the Department in August, include a duty for servicers to pursue loss mitigation for homeowners to avoid preventable foreclosures, and include clear standards for the handling of foreclosure prevention efforts.
Other highlights from the data include:
►The five counties with the highest share of pre-foreclosure notices in the state are: Suffolk (14.8 percent); Queens (11.3 percent); Nassau (10.2 percent); Brooklyn (8.2 percent) and Westchester (4.7 percent).
►The five counties with the highest percent of pre-foreclosure notices per mortgage are: Ulster (8.1 percent); Bronx (7.5 percent); Sullivan and Orange (7.1 percent); Suffolk (seven percent) and Queens (6.8 percent).
►More than half, or 70,871, of the pre-foreclosure notices were sent on mortgages or refinances originated between 2005 and 2007.
►Throughout the state, more than 29 percent of the pre-foreclosure notices were sent on loan amounts under $100,000, which suggests that economic issues are at the root of current defaults as such loan amounts are significantly less than home values.
►More than half, or 78,046, of the pre-foreclosure notices sent were on mortgages that were less than 60 days delinquent.
Starting next month, the Banking Department’s online filing system will begin accepting lis pendens information on mortgages that have a pre-foreclosure notice file in the system. A lis pendens is a written notice that a lawsuit has been filed against a property and is the legal beginning of foreclosure process. The 90-day pre-foreclosure notices received by borrowers do not indicate the beginning of the formal foreclosure process or that the household will subsequently receive a lis pendens; rather, the notices are designed to inform the borrower that they are at-risk of foreclosure and what preventative steps are available to them.
If a borrower does not become current on their mortgage within 90 days of receiving the notice, the lender then has the right to begin the formal foreclosure process by filing a lis pendens. This lis pendens data will be included in the Department’s next pre-foreclosure notice report, which will be issued in January 2011.
For more information, visit www.banking.state.ny.us.