By Dan Garodnick, I. Daneek Miller and Donovan Richards – Crain’s New York Business
The mortgage foreclosure crisis ravaged communities throughout New York City, and its impact is still being felt today. After the recession, homeowners found themselves holding mortgages whose terms were changing unfavorably before their very eyes. Thousands of families lost their homes and entire neighborhoods suffered from vacancies, blight and declining values. While there has been a recovery in much of the country, the problem persists here, especially in southeast Queens.
As the de Blasio administration pushes its plan for new housing, we should not lose sight of renovating and stabilizing foreclosed homes as a way to create or preserve affordable housing. There have been few chances for the city to grab hold of the foreclosure problem and to put New Yorkers back in affordable homeownership. Until now.
On July 15—a mere six weeks from now—the Federal Housing Administration will put distressed mortgage notes up for sale and allow municipalities the first chance to buy them, possibly in particular geographic areas.
Imagine: New York City can negotiate with the federal government to buy countless distressed notes, restructure them on more favorable terms, and resell them to the current homeowners or new low- and moderate-income New Yorkers who can support the debt. We can do it, but we will need fast action and real partnership from federal housing officials.
Southeast Queens saw 9,000 homes go into foreclosure between April 2013 and March 2015. In addition to the impact this has on our communities, pre-foreclosed real estate alone is costing the city roughly $84 million in unpaid property tax annually. Sadly, the banks have turned their backs on these New Yorkers, unable or unwilling to renegotiate many of these mortgages—even when it was in their economic self-interest to do so. In many cases the mortgages had been packaged and securitized, creating amorphous ownership and little flexibility to work things out. [read more]
By Alan J. Heavens – The Inquirer
A couple of studies have crossed my electronic desk, and I thought I’d share them with you, because both relate to topics I have written about in recent weeks.
The first is a Cornell University analysis, published in an article in the June issue of the American Sociological Review, contending that foreclosures “fueled racial segregation in the United States.”
The paper, co-authored by Kyle Crowder of the University of Washington and Amy Spring of Georgia State University, acknowledges that nine million American families have lost their homes to foreclosure since the real estate downturn started in 2007.
“Hardest hit,” they say, were African American, Latino, and racially integrated neighborhoods.
The researchers estimate that racial segregation grew between Latinos and whites by nearly 50 percent and between blacks and whites by about 20 percent as whites abandoned and minorities moved into areas heaviest with foreclosures.
The foreclosure crisis “spurred one of the largest migrations in U.S. history, changes that could alter the complexion of American cities for a generation or more,” said the lead researcher, Michael Hall, an assistant professor at Cornell.
“Among its many impacts, the foreclosure crisis has partly derailed progress in achieving racial integration in American cities,” he said.
Hall and his researchers looked at foreclosures between 2005 and 2009.
RealtyTrac, the foreclosure search engine, considers 2005 as the last year with what it terms a “normal” level of foreclosure filings – 500,000.
A single property may be represented by several filings as the financial and legal aspects of a foreclosure are worked out, says RealtyTrac, which is based in Irvine, Calif.
As of January, 5.5 million foreclosures had been completed since the financial meltdown of September 2008, says real estate data provider CoreLogic. [read more]
By Chris Sieroty – Nevada Public Radio
Foreclosures continue to be a problem holding back Nevada’s real estate market. RealtyTrac reported foreclosures in Nevada jumped almost 40 percent last month, making the state the second in the country for the highest residential foreclosure rate.
RealtyTrac, a real estate analytics firm, found one in every 555 homes statewide was subject to a foreclosure filing. Only Florida was worse with one in 425 homes having a foreclosure filing. [read more]
By Lester Graham – Michigan Radio
Thousands of Detroit and Wayne County homeowners face tax foreclosures. Some of those families still have time to save their homes, but they might be paying more in taxes than they should have had to pay.
Cheryl West has been living in her home for 60 years. Her family bought it when she was eight years old. It’s near the historic Boston-Edison neighborhood in Detroit. But she lost it to tax foreclosure before she learned all her options.
“The house had already gone for eviction, that I was to be evicted from the home. By that point it had gone for auction,” she explained.
She now rents the house, but she suspects the landlord will evict her and move into it.
All indications are that West never should have lost the house. She lives on her Social Security check. People with incomes near poverty can get a poverty exemption on their taxes. [read more]
By David Dayen – Vice.com
Eric Mains is fulfilling a dream many Americans have had since the onset of the financial crisis seven years ago: He’s attacking fraud in the banking industry as aggressively as he can, using every possible tool under the law to achieve justice —and win some money back for himself.
Mains, a former team leader with the Federal Deposit Insurance Corporation (FDIC), has become so bitterly embroiled in a six-year dispute with his mortgage lender that he left the regulatory agency, fearing that he might have to eventually name it as a defendant in a federal lawsuit. He’s one of a small yet determined band of people still fighting foreclosure (the seizure of property) cases with obscure and sometimes arcane arguments, built on a simple yet mind-blowing premise: The true ownership of millions of mortgages issued during the housing bubble was fatally corrupted, and now it’s impossible to prove who actually legally controls those mortgages.
Recent Supreme Court precedent suggests that by rescinding his mortgage—canceling it, basically—Mains and people like him can put the onus on banks to prove they have the right to assets like his house in the first place. If Mains or his allies succeed, they would rip open a wound that virtually everyone in power has tried to stitch up and forget. But such a long-awaited victory wouldn’t make up for the years of stress and personal hardship Mains has suffered, including a failed marriage and now the end of his career in public service.
“I had to ask myself a question: Will I do this no matter if it hurts?” Mains told me. “I said yes. If I can afford to fight these suckers and bring this illegality to light, that’s why I went to law school.” [read more]
By Kim Miller – Palm Beach Post
Florida’s foreclosure courts have been getting an extra allowance the past two years to expedite cases, but the cash flow is about to be cut off.
More than $21 million budgeted in 2013 to add judicial manpower to the bench expires June 31.
Without the added cash, attorneys are predicting a mixed bag of confusion as cases are transferred to different divisions, but also benefits to homeowners who may get a single judge dedicated to their case.
“The legislature gave us enough money to get to the five-yard line, but it would have been nice to get across the goal line,” said Palm Beach County Chief Judge Jeffrey Colbath. [read more]