Originally published: June 13, 2012 10:18 PM
Updated: June 13, 2012 11:55 PM
By MAURA MCDERMOTT email@example.com
The long-expected flood of foreclosures is fInally hitting Long Island. Foreclosure filings were up 50 percent in Suffolk County and nearly 34 percent in Nassau County in May compared with the same period last year, according to a report released today by data provider RealtyTrac.
There were 919 foreclosure filings on Long Island last month, compared with 652 in May 20ll. Many families will suffer as foreclosure rates rise, especially because rental housing is so hard to come by, said Pearl Kamer, chief economist with the Long Island Association. The foreclosure wave is also likely to depress housing prices for about 18 months, she said. However, she said, "in order to have a full recovery in the real estate market, these foreclosed homes have to clear the market."
Foreclosures rose locally even as they fell 4 percent nationwide. The court approval required for foreclosure in New York has slowed down the process, causing the crisis to linger in New York and other states that require judicial approval even as the rest of the nation starts to recover, according to RealtyTrac. Local real estate experts say they have been anticipating the increase ever since fIve major mortgage lenders announced a $25-billion settlement with the federal government and 49 state attorneys general in February, resolving the so-called robo-signing scandal.
"It's a little sad but there has to be some movement, you can't just have homeowners sitting in their homes, not knowing what to do," said Vincent Cuocci, an attorney in Patchogue. Keri Motl, 37, has been trying to get the mortgage on her Patchogue home modified for five years. Her husband David, 39, an ironworker, has endured years of months-long layoffs since 2006. She left her job as a caseworker in 2004 to care for their twin boys, now 7, and her ailing mother, who died in 2009. They also face hefty medical bills for their 17-year-old daughter.
Overwhelmed by bills, they stopped making mortgage payments two years ago. Now they're starting to get back on their feet: David has been working steadily for almost two years, and Keri plans to get training for a medical job. However, they fear it may be too late. Their mortgage lender, GMAC, sent them a foreclosure notice in May. "Nobody was willing to work with us and do some sort of hardship. program," she said. A spokeswoman for the lender said in a statement, GMAC "strives to find affordable and sustainable alternatives to foreclosure whenever possible," and "has completed more than 784,000 default workouts for borrowers."