Published April 7, 2011
By ELLEN YAN email@example.com
One out of every 10 mortgage borrowers on Long Island was at least 90 days late on payments in January, a new report said Wednesday. CoreLogic, which tracks existing loans, shows the 10.2 percent delinquency rate was the highest since January 2009, the oldest data available Wednesday from the company. Back then, the rate was 5.5 percent. CoreLogic's report said 5.8 percent of mortgages were in the court foreclosure process. That's also greater than at any time since Jan. 2009, the earliest they have data for, when the rate was 2.5 percent. Both delinquency and foreclosure rates have been trending up since the collapse of the subprime loan market in fall 2007 and Wall Street a year later, which led to high unemployment. The foreclosure rate is lower than the delinquency one because lenders are either working with borrowers to help them avoid foreclosure or are still getting foreclosure papers in order.
Housing nonprofits forecast more stormy times ahead because federal funds for foreclosure prevention counseling expire at the end of this year. State officials have said they cannot afford to fund the counselors. Counselors, most of them hired with federal aid, will likely be let go, said Jerry Coppola, outreach coordinator at the Economic Opportunity Council of Suffolk, which has three counselors handling about 1,000 foreclosure cases. "People are waiting in some cases four to six weeks for an appointment," he said, predicting more foreclosures. New York State's delinquency rate was 7.7 percent, the foreclosure rate 4.2 percent, data show. Diane Westerback, who tracks mortgages as a managing director at the Standard & Poor's ratings agency, sees another reason for delinquencies to rise: Falling home prices and a slow housing market. Those two conditions will become more extreme, she said, as federal mortgage giants Fannie Mae and Freddie Mac begin bowing out of home financing and private markets struggle to fill the void.