While the rest of the United States has started recovering from the 2008 Housing Bubble that followed the collapse of the Lehman Brothers, foreclosure cases in Long Island are still on the rise. In fact, lending firms, both bigtime and smalltime, has filed more than 12,000 cases in just the first three quarters of 2013. This number represents a 50 percent increase vis-à-vis the recorded statistic within the same period of the previous year. The nationwide trend points to a 34 percent decrease.
The fraction of homes in jeopardy due to the looming threat of foreclosure in Long Island averages about 5.8 percent – much higher than the nationwide average of 2.8 percent. These numbers present a huge blow to the confidence of lending companies and banking institutions.
Financial experts say that Long Island’s mortgage woes persist due to a variety of reasons including the state of New York mandating a three-year foreclosure procedure which ties that of the state of New Jersey as the longest in the whole country. Aside from this, a Long island foreclosure lawyer observed that in most cases he handled, the mortgage package offered in the island is riskier than the average offered in surrounding regions.
Also seen as a factor is the region’s inability to create high-paying opportunities. In fact, Long Island counties Nassau and Suffolk suffered a blow in terms of their median annual household income, making most people living in said counties unable to finance their loans.
One solution eyed by experts in solving this problem is renegotiating loan packages to give homeowners more flexible payment plans to cure their loans. There’s just one problem – most banks in the region are not amenable to providing mortgagors loan modifications despite the 2012 settlement agreement between five major lenders. They agreed to modify foreclosure practices and offer assistance to distressed homeowners. This $25 billion settlement between the federal and state agencies only proved to be futile mainly because of how four of the five major banking institutions who participated in the agreement failed to comply with the terms of the agreement.
The rise of the foreclosure statistic in the region has forced its residents to seek a good Long island foreclosure lawyer to represent them in default suits filed by lenders as the necessary first step in judicial foreclosure process. The residents’ contention rests on the banks’ violation of settlement terms by their failure to promptly inform homeowners about missing pertinent documents.
Effect on the Housing Market
Aside from the threat of residents losing their homes – reaching as much as 7,000 for Nassau and 13,000 for Suffolk – Long Island’s housing market continues to plunge despite the industry’s recovery throughout the rest of the United States. State housing agencies noted that the general optimism on investing in residential properties and real estate developments has dampened since the increase of mortgage defaults in the last decade.
Even when the price of many houses in the regions started to decrease and with some jobs, ironically including that of a Long island foreclosure lawyer, recovering from economic slump, people still refuse to invest in new properties unless banks overhaul their foreclosure practices and allow for more lithe payment plans.
While developers continue to suffer from this setback, the people that are most greatly affected are the families whose properties are now in foreclosure pipeline. Firms that offer the services of a Long island foreclosure lawyer have been benefitting from the steady number of families requiring their help in desperate attempts to delay mortgage suits and thus, the foreclosure process. In response to the resulting high demand for their services, several firms offered free consultations that allow for families to weigh in on legal and economic options available to them.