Backlogs slow LI foreclosures in December

Originally published: January 11, 2012 10:04 PM
Updated: January 12, 2012 12:03 AM

Foreclosure activity on Long Island was slow last month, reflecting backlogged paperwork and court delays rather than any real improvement in families' ability to pay their mortgages on time. California-based RealtyTrac said foreclosure-related filings in Nassau and Suffolk fell by 34 percent in December, to 527, from a year earlier. For all of 2011, the number of Long Island homes that received some type of foreclosure-related notice fell by 40 percent from 2010, to 7,811. The decline was particularly dramatic in Suffolk: 53 percent.

Garden City attorney Keith Lederman, who represents clients in foreclosure matters, said the average Suffolk homeowner probably fell behind on payments earlier in the recession than Nassau homeowners, who tend to be more affluent. The year-to-year decline results mostly from the lagging effects of documentation problems among lenders and servicers that delayed many foreclosure filings. Fidel and Herminia Bonilla won a dismissal in a Nassau County court on Monday of the foreclosure action against their home in Freeport after their attorney, Karen Ferrare of Hempstead, argued that the lender's documents were flawed. The Bonillas fell behind on payments when their interest rate began rising in 2008 and had no luck getting the loan modified. "I called the bank and they didn't pay any attention," said Fidel, who drives a tractor trailer while his wife cares for their two children. While the delays have provided a reprieve for some homeowners, they also, in effect, kicked the housing crisis can down the road. Foreclosed homes for sale have helped to depress the prices of all homes. RealtyTrac said the delays have lengthened the foreclosure process, which took an average of 348 days nationally in last year's fourth quarter, up from 305 days a year earlier. New York's average was the longest of any state: 1,019 days. Some experts forecast an uptick in foreclosures this year, as lender paperwork and the courts catch up with the backlog. "There were strong signs in the second half of 2011 that lenders are finally beginning to push through some of the delayed foreclosures in select local markets," Brandon Moore, chief executive of RealtyTrac, said in a statement accompanying the figures.  Lederman, who worked with Ferrare on the Bonilla case, also expects a rise: "You're going to see a big resurgence."