From the Journal News:
National problems with the subprime mortgage market are surfacing in the Lower Hudson Valley, as creditors go to court to foreclose in sharply higher numbers this year, a survey of county clerks’ offices shows.
Mortgage counselors in the region say calls for their help are up as well, as homeowners who are behind on monthly payments scramble for ways to save their houses.
The prospects aren’t good, some counselors say. Though there are some new programs to help borrowers looking to refinance, the programs have limits on how much money may be available. In many cases, it’s less than what the borrowers need.
“Unfortunately, it’s kind of grim,” said Blanca Lopez, director of Port Chester-based Human Development Services of Westchester. “We know in the long run these people are not going to be able to afford their homes.”
Many first-time homebuyers with less-than-perfect credit were able to get houses in recent years with adjustable-rate mortgages that had low introductory rates. Those loans, many requiring no down payments or no income verification, have been resetting in the past year, often to levels that are beyond the ability of the borrowers to pay.
In Westchester, the number of foreclosure filings brought by creditors rose 39.4 percent through August, year over year, to 1,414. Actual judgments of foreclosure, in which the court authorizes lenders to take back the property that served as collateral for the mortgage, were up 61.8 percent to 424.
In Rockland County, where numbers were available through July, the filings were up 12.7 percent to 692. Judgments were up 94.4 percent to 175.
In Putnam County, foreclosure filings were up 50 percent through August to 294. No judgment data was available in the county.
“A lot of people, they’re living by paycheck to paycheck in their general lives,” said David L. Babel, an Eastchester attorney who specializes in clients with troubled credit. “They have options, but in many cases they’re not that good.”
Refinancing such loans is difficult because the sluggish real estate market has reduced the market value of some houses to less than what is owed.
Dianne Chipman, co-executive director of Putnam County Housing Corp. in Carmel, said her organization has added a staff member to help handle the new workload. The agency gets 15 calls a week for help, while a year ago it would see perhaps 20 such cases in three months, she said.
Levy said the mortgage problem was exacerbated by unsophisticated borrowers who didn’t understand the complicated nature of their mortgages, and by lenders who weren’t worried about their clients’ ability to pay.
Lenders often sell such loans to other investors.
Levy said one woman who came to her for help four months ago had been able to obtain a $360,000 mortgage, even though she made only $25,000 to $30,000 a year.
“The bank knew what she was making, and they gave her the loan anyway,” Levy said.