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Foreclosure activity ticks upward in Capital Region in 2018

Foreclosure activity ticks upward in Capital Region in 2018

State comptroller's office reports big drop over five years
Foreclosure activity ticks upward in Capital Region in 2018
Although trending down over the past five years, several Capital Region counties saw an uptick in foreclosure activity in 2018.
Photographer: Stock images

ALBANY — Several Capital Region counties saw an uptick in foreclosure activity in 2018.

The state comptroller’s office earlier this month issued the latest of several reports on mortgage foreclosures it has compiled annually since the financial crisis a decade ago.

Using data provided by the state Office of Court Administration, the report tallies all mortgage foreclosures on the court calendar each year at the end of Term 7, which typically runs from mid-June to mid-July. These include residential and non-residential mortgages and multiple mortgages on the same property.

The state as a whole and every one of its regions saw substantially less foreclosure activity in 2018 than in 2013, the reports showed, though some regions saw an increase from 2017 to 2018. The comptroller’s office noted that changes in court data reporting systems had boosted the 2018 numbers in a few counties, including Saratoga County.

The Legal Aid Society of Northeastern New York is involved in many of these foreclosure cases in and around the Capital Region, assisting 391 households since April 1, 2018.

Geri Pomerantz, managing attorney of Legal Aid's Foreclosure Prevention Project, said there are two ways of tallying foreclosure actions: Initial notices of delinquency issued to mortgage holders and cases that reach the court. 

“The important numbers are the delinquency numbers, and they’ve been increasing,” Pomerantz said. “That data really tells you that people are in trouble.”

Legal Aid attorney Marlene Morales said: “We’ve seen some people re-defaulting on their loans as interest rates step up.”

Morales said expiration of the federal Home Affordable Modification Program is likely a factor in this, as it had provided assistance to those with a documented financial hardship.

One of the success stories for the Legal Aid Society of Northeastern New York was Donald and Donna Connors, who bought a house at the height of the 2000s real estate boom, saw their $1,300-a-month payment double under an adjustable-rate mortgage payment and lost the client base of their printing company to old age and changing technology.

Legal Aid attorney Shruti Joshi renegotiated their monthly payment to less than the original amount, Donald fell back on his plumbing skills, Donna started a business, and the couple were able to keep their home.

Donna Connors is effusive about Joshi, considering her something of a miracle worker.

“I had no idea their resources were even available to us,” Connors said. “We tried to do those things ourselves and it was just impossible.”

At $225,000, the house on five acres in rural Columbia County wasn’t an extravagant buy for an older empty-nest couple, nor even a particularly expensive one. They just got caught between too many moving pieces of the economy, and fell behind on their mortgage.

“We don’t live a lavish lifestyle — there was basically no money coming in,” Donna Connors said. “My husband now has full-time employment with a local company, he’s the lead plumber and he’s doing very well.”

The house came with a six-foot chain link fence around a big patch of lawn, so Donna went into business for herself as a doggy day-care provider. She also takes her two certified therapy dogs to visit group-living facilities.

That was another fear put to rest: If they'd lost their home and had to rent, would a landlord let them keep their dogs? Possibly not: One is a Rottweiler.

State Comptroller Thomas DiNapoli hailed the decline in foreclosure activity over the past few years.

“While this is an improvement, the foreclosure crisis is far from over,” said DiNapoli in a release. “To extend the progress we’ve made, New York must continue to support the programs and reforms that have helped homeowners avoid foreclosure and communities reduce blight caused by zombie properties.”

The previous report by the comptroller’s office on foreclosure activity was in 2016, soon after it peaked. 

DiNapoli said state court administrators have since taken steps to expedite foreclosure proceedings while also treating borrowers and lenders fairly.

Foreclosures accounted for 33 percent of the civil caseload in New York courts in 2013 but only 18 percent in 2018, his report noted. The report suggests a combination of changes in the housing market and economy, tighter lending standards and higher housing values all have contributed to the decline.

The report warned that rising interest rates, looser lending standards or a recession could cause a rebound in foreclosures. It also notes that homeowner assistance programs run by nonprofit organizations — 89 of them, by one count — have been critical to reducing the number of foreclosures. The funding stream for these programs will expire shortly and any replacement is subject to state budget negotiations.

PENDING FORECLOSURES

This chart shows the number of pending foreclosure cases on the court calendar in Capital Region counties at the midpoint of each year from 2013 to 2018:

  • Albany - 861 1,161 1,086 930 653 666
  • Fulton - 308 424 464 287 128 180
  • Montgomery - 312 433 379 224 102 155
  • Rensselaer - 677 908 614 564 378 344
  • Saratoga - 808 987 650 473 337 512
  • Schenectady - 1,057 1,302 1,040 606 406 406
  • Schoharie - 68 165 196 135 62 79
  • Statewide - 78,750 91,886 88,190 78,005 52,732 45,842
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