Real-estate analyst Keith Jurow is worried by data he ferreted out of New York State that shows the number of properties in pre-foreclosure in New York City and Long Island are much greater than commonly cited reports show. In this piece for MarketWatch, he shares his fears that this may also be the case in most markets that were epicenters of the housing crash.
Here’s what’s happening in New York that is likely occurring in other major U.S. real estate markets. In 2009, the New York State legislature passed a statute requiring all mortgage servicers to send a pre-foreclosure notice to all delinquent owner-occupants in the state. The notice warned them that they were in danger of foreclosure and explained how they could get help. Servicers were required to regularly send statistics back to the state's Department of Financial Services for all notices sent out. The department published two reports in 2010 with a compilation of these numbers. That was the last time these statistics were officially reported.
I have obtained the unpublished figures from a person involved with compiling the pre-foreclosure notice filings for the department. The latest update shows cumulative figures through the third quarter of 2018, covering New York City as well as Nassau and Suffolk counties on Long Island. Totals for the entire state are also included.
Here is a brief summary of what the data show. Since February 2010, mortgage servicers have sent out a total of 1,242,490 pre-foreclosure notices to delinquent owner-occupants in New York City and Long Island. This does not include delinquent investor-owners because that was not required under the 2009 law. About 85% of these notices were for delinquent first liens and the remainder were for second liens.
