Preforeclosure Notices Help Target Outreach

At least 57,256 90-day preforeclosure notices were sent to New York homeowners who have fallen behind on their mortgage payments since Feb. 13, according to the New York State Banking Department.

The five counties with the highest total number of preforeclosure filings on owner-occupied, one-to-four family properties in the state are Suffolk with 8,293, Queens with 6,267, Nassau with 5,755, Kings (Brooklyn) with 4,485 and Erie with 2,917.

The data were based on filings from almost 200 mortgage loan servicers between Feb. 13 and May 31, in accordance with Gov. David Paterson’s 2009 Mortgage Foreclosure Law.

The new law requires all servicers of New York residential mortgages to provide the department with key information from the 90-day preforeclosure notices sent to homeowners. More than half, or 30,182, of the preforeclosure notices were sent on mortgages or refinances originated between 2005 and 2007.

Throughout the state, more than 31% of the notices were 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 31,044, were on mortgages that were less than 60 days delinquent. “We are well past the point of this being a subprime or predatory loan crisis,” said Richard Neiman, superintendent of banks for New York State.

“The recession and job losses, as well as the overall decline of the housing market, have led to the current situation of responsible homeowners who may have had a good loan being overwhelmed by temporary economic hardships.”

These notices, which have been required by New York banking law for high-cost, subprime and nontraditional mortgages since September 2008, notify homeowners of their default status and outline steps they can take to avoid foreclosure, including working with a local, nonprofit housing counselor.

The 2009 reforms amended the law to require preforeclosure notices on all residential mortgages as of January 2010.

To date the banking department has shared information with the following nonprofit counseling agencies: Affordable Housing Partnership on behalf of the HomeSave Coalition, Center for New York City Neighborhoods, the Housing Council, Housing Assistance Program of Essex County, Metro Interfaith Housing Management Corp., Utica Neighborhood Housing Services, Opportunities for Chenango Inc., Community Development Corp. of Long Island and Greenpath Inc.

Susan Cotner, executive director of the Affordable Housing Partnership, said the organization is anxious to reach out to homeowners in an effort to resolve issues before an “expensive foreclosure process begins.”

“In the capital region we are inviting owners to attend one of our monthly foreclosure clinics to meet one-on-one with experienced attorneys and housing counselors to review options. Homeowners can get well-informed advice at no charge, and do not need to pay a mortgage ‘rescue’ company that may end up scamming them by taking their money and providing no relief,” she said.