Westchester Foreclosure Spike Not An Economic Indicator, Legislator Says

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Legiuslator Peter Harckham (D-North Salem) chairs the Labor/Parks/Planning/Housing Committee.
Legiuslator Peter Harckham (D-North Salem) chairs the Labor/Parks/Planning/Housing Committee. Photo Credit: Brian Donnelly
Westchester County Clerk Timothy Idoni, left, and Westchester Residential Opportunities In. director Veronica Raphael talk about the spike in foreclosures in 2013 and 2014.
Westchester County Clerk Timothy Idoni, left, and Westchester Residential Opportunities In. director Veronica Raphael talk about the spike in foreclosures in 2013 and 2014. Photo Credit: Brian Donnelly
The Westchester Planning Department shows the foreclosure filings and judgments from 2005 through March 2014.
The Westchester Planning Department shows the foreclosure filings and judgments from 2005 through March 2014. Photo Credit: Brian Donnelly
The Westchester Planning Department shows the foreclosure judgments by town as a percentage of total housing units from 2008 through March 2014.
The Westchester Planning Department shows the foreclosure judgments by town as a percentage of total housing units from 2008 through March 2014. Photo Credit: Brian Donnelly

WHITE PLAINS, N.Y. – Foreclosure judgments on Westchester homes spiked 514 percent in February and 200 percent in March, which Westchester County legislators said was a ripple effect from the housing crisis and isn’t a reflection of the county’s economic health in 2014.

Westchester County Clerk Timothy Idoni said that about 90 percent of the foreclosures were filed two-to-three years ago. The number of judgments had dipped 41 percent in 2011 and 32 percent in 2012, but rose 23 percent in 2013.

“We’re starting to see that kind of stuff clearing out,” he said at a meeting of the county Board of Legislators Labor/Parks/Planning/Housing Committee Tuesday.

In some cases banks haven’t taken the title on a foreclosed home because of new obligations placed on them by the courts to maintain the property, said Norma Drummond, deputy commissioner of the Westchester County Planning Department. As a result banks don’t want as much inventory and are handling foreclosures differently than they used to before the recession.

Legislator Peter Harckham, who chairs the Labor/Parks/Planning/Housing Committee, said this prevents a municipality or county from buying the property and potentially reusing it for affordable housing.

"The rise in the statistical number of foreclosures... it’s not really indicative of the economic condition of the county as it stands right now," Legislator Michael Smith (R-Mount Pleasant) said. 

Yonkers has the most total housing units in foreclosure, 793 as of March 31, 2014. That represents .99 percent of the city's total housing units, 80,389, the seventh highest percentage in the county. Mount Vernon has the highest at 1.84 percent, followed by Peekskill with 1.66, Lewisboro with 1.17, Bedford with 1.03, Ossining with 1.06 and Cortlandt with 1.01 percent, according to the county planning department.

Many of the residual foreclosures are a result of what Idoni called robo signings, where lenders would approve loans without verifying an applicants’ paperwork," Drummond said.

“A lot of these people were fooled into thinking they were going to be able to sell their homes for more than they bought them for, even if they fell behind on their payments, because the market was going up and up,” he said. “All of a sudden the bubble burst in ‘07 and now they’re under water and there’s no way to get their money back and pay the loan at the same time.”

Westchester can now file a complaint with the New York Attorney General’s Office against a lender who “is not performing in good faith” thanks to the home ownership protection plan, which was instituted last year. The lender would have to give the loan a second look and possibly modify it, Idoni said.

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I think the bigger issue is not the foreclosures for inability to pay but that many people I know are voluntarily foreclosing when short selling fails them because they are done with being trapped in Westchester for the past 5-8 years or making two housing payments. The recession weeded out most of the people who were over their heads...the current issue in my opinion is that most of the 30-45 year old demographic own house/co-ops/condo that are not above their means and paying the mortgage is not the problem it is that they were meant to be starter condos/homes and now they want to have kids (but live in one bedrooms, have 1-2 hour commutes and two working spouses to try to pay down the mortgages to try to move/afford day care, etc) or be able to take jobs offers in other states/town/etc but unfortunately the condo/co-op/small home market in many towns is still at half of what people paid so the options are stay in the one bedroom/studio/current home until the loss is manageable and then go back to the renting and saving deal again (potentially further delaying job growth, having kids, moving closer to family who have left the area, etc.), move and pay two housing payments (I have many friends and former coworkers who had to do this for professional or personal reasons...and even when they can rent it rarely covers the full amount and has its own issues) or foreclose and deal with the ramifications but be free of the market.

In many cases people waited 5 years hoping to even break even but are still in the position where to move they need cash of 20-50% of the current home and 20% of the new home plus all the fees to even make a parallel move and people are done waiting.

It is also going to get worse because now you have a generation that has been turned off of real estate and see little benefit in a million dollar raised ranch in our town with a expensive 2 hour commute to where the jobs are....so best of luck when people try to retire, I fear another wave is in the future.

One important thing that is not being mentioned anywhere is, the increasing number of tax foreclosures. Hundreds of homeowners are being kicked out of their homes due to not paying their property taxes, which are astronomically high, especially in Mount Vernon, where the property tax rate is the highest in NY.

How does the value of your house affect your ability to pay your mortgage....or if the market had continued to rise, would these people have shared their gains with anyone?

This is a sad and vicious cycle. The bamks lent money to anyone who could sign their name. But the buyers were just stupid going into a loan knowing tit was above their means. No common sense!

Let's not forget the government's responsibility in all of this. It was under the Clinton administration that strong financial controls were removed to satisfy the Democratic mantra of a house in every pot. This is why money was able to be lent by shysters. To add insult to injury it was none other than Governor Cuomo that required, while Secretary of HUD, that 40% of its loans be to those low income earners. i.e., sub prime loans. Of course, what could possibly go wrong? These loans are backed up by the Federal Government! Sen. Schumer at the time bragged in the face of Republican warnings and attempts to stop the madness, "we should be giving out more of these loans." He is on YouTube declaring this preposterous statement.

The Democrats caused the problems, by ordering banks to provide mortgages for anyone who wanted to buy a house. I know some people who were offered $500K mortgages with payments of $200/month, and their incomes were less than $40K! Most had the brains to know they could never afford the paybacks, but a few were dumb enough (the same people who voted for Obama) to take on the hefty mortgages, and now they have nothing, are back to living in cruddy apartment housing.

Indeed...don't forget Barney Frank stammering for more or Chris Dodd's sweetheart mortgage deal

This is funny. Of course it is an indicator of the grim reality out there. But if they don't believe the foreclosure rates, just look in the papers for the increase in suicides. This country is becoming a harsh and unforgiving place to live---and Westchester County---forget about it. If you are not rich, go elsewhere.