Judgments up, no end seen to Westchester foreclosure crisis
White Plains attorney Peter Spino Jr. cited a number he”™d tallied from the Westchester state court calendar for October and November to assess the current state of the county”™s mortgage and foreclosure crisis: 56.
That”™s the number of requests for judicial intervention, or RJIs, brought by lenders”™ attorneys in foreclosure cases in the county in roughly the last two months. Spino represents defaulting homeowners in foreclosure defense, loan modifications and short sales of their properties.
“That”™s still a significant number,” he said. “That”™s not as much as at its peak, but it”™s still a lot.”
Westchester County Clerk Timothy C. Idoni would agree. His office this month in a third-quarter report said 871 foreclosure judgments were issued in state Supreme Court in Westchester County through September this year. That is 99 more than the total foreclosure judgments issued in the county in 2014, when judgments against owners defaulting on mortgage loans more than doubled from the previous year.
The county is on pace by year”™s end to surpass the record-setting 1,034 judgments in 2008 in the depths of the mortgage crisis.
“These numbers are indicative of an alarming trend in New York state, especially in suburban areas, that the foreclosure crisis is far from over,” Idoni said when releasing the report.
Attorneys for lenders and loan servicers through September this year filed 1,697 foreclosure actions ”” the first step in a typically protracted court process that can end in a bank auction sale and possible eviction from one”™s former home. That is about the same pace of filings through three quarters as in 2014, when the state court in White Plains had 2,326 foreclosure filings for the year.
“These judges have stacks of hundreds of backlogged foreclosure cases,” Spino said. “They”™re sick of it.”
“We don”™t read about it anymore,” he said of the continued rash of foreclosures in the county and nationwide. An attorney for 15 years, ”˜I”™ve been doing this (foreclosure defense) seven or eight years. I thought it would end three or four years ago.” Some of his foreclosure cases are 5 and 6 years old, he said.
Spino said bank attorneys have told him many of their current foreclosure actions involve homeowners defaulting on loan modifications worked out with their lenders. They agreed to modified mortgage payments in order to keep their homes, “but they were stretching their finances to do that,” he said. For mortgage borrowers in default, “The only way to save your home still is to get a loan modification.”
The surge in judgments in the county this year “is just a byproduct of these cases coming to conclusion,” Spino said.
Some homeowners avoid foreclosure and eviction by selling their properties, with their lenders”™ approval, at prices below their outstanding mortgage debt.
“There are still a significant amount of short sales all over the place and that”™s a byproduct of foreclosures,” Spino said.
At Westchester Residential Opportunities Inc. in White Plains, foreclosure prevention director Veronica Raphael said staff has seen homeowners returning for mortgage default counseling after defaulting on loan modifications that either came with unaffordable terms or could not be paid because of lost employment or other factors.
For struggling owners with loan modifications, “One little slip and they”™re back into foreclosure,” Raphael said.
“We”™re seeing a lot of delays” by banks in working out modifications or moving ahead with foreclosure, Raphael said. She said some home-owning clients in default have been living in their homes for more than three years without a resolution.
Others in Westchester have been evicted from bank-owned houses that stay vacant for two or three years. “That adds blight to the neighborhood,” Raphael said.
“There has never been any real solution” to the foreclosure crisis, she said. “The banks are encouraged to give modifications; they”™re not forced to. I think that”™s been a mistake.”
“I don”™t see it changing any time soon,” she said. “It really depends on the servicers and the government to come up with a better plan now that they”™ve been into this six or seven years. It”™s not a cookie-cutter solution. One solution is not going to solve all the issues.”
Westchester residents who have lost their homes in a foreclosure action enter a “really tight” rental market in the county, Spino said.
“Going out and trying to find a rental is very hard to do when your credit”™s destroyed and it”™s a tight market,” the attorney said.