NYC Foreclosure Monitor - January 2010 to April 15, 2010

A recent report by realtytrac.com notes a rise in foreclosure cases filed in NYC. March 2010 foreclosure filings were 30% higher than foreclosure filings in February 2010. On a quarterly basis, first quarter 2010 saw a decrease of 2% as compared to fourth quarter 2009. However, in comparison to first quarter 2009, first quarter 2010 was 10% higher. Realtytrac also reported that through out the nation more properties were taken over by banks and scheduled for a foreclosure sale than in any other quarter since January 2005.

2010 Manhattan Foreclosure Filings

From January to March 2010, a total of 359 foreclosure cases were started in Manhattan. This averages to approximately 119 foreclosure cases per month. There have been 61 foreclosures cases started from April 1 to April 14.

2010 Brooklyn Foreclosure Filings

From January to March 2010, a total of 2,251 foreclosure cases were started in Brooklyn. This averages to approximately 750 foreclosure cases per month. There have been 315 foreclosures cases started from April 1 to April 14.

Will NYC see a decrease of foreclosures in the long term or should we expect an overall increase in foreclosures? We expect an increase in foreclosures. There is a growing inventory of distressed property on the market. There are other factors in play. There is a large "shadow inventory" of unsold condos; banks have significantly reduced lending through stricter lending standards; interest rates are slowly creeping up; and the unemployment rate is increasing while wages are stagnant. We are entering the adjust dates for many of the 3 to 5 year adjustable rate or option arm mortgages utilized by many property buyers.

With this in mind, the primary question is "how will a homeowner get out of their distressed situation?"The choices for a property owner are: 1.) negotiate a loan modification 2.) successfully defend a foreclosure action. 3.) short sale. 4.) deed in lieu of foreclosure and/or 5.) bankruptcy.

It is important for all property owners to seek the advice of a qualified and experienced professional before making a decision.

You can contact the author Gordon Sokich at gordon@luxornyc.com.