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Foreclosure rates down, for now

By: Todd Etshman//August 16, 2011

Foreclosure rates down, for now

By: Todd Etshman//August 16, 2011//

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The latest local and national foreclosure figures provided by RealtyTrac Inc. indicate foreclosure rates are down, but these figures certainly don’t indicate the foreclosure crisis is ending.

Foreclosure activity hit a 44-month low in July and was down nearly 35 percent from July 2010, according to RealtyTrac’s latest figures.

Additional figures released by show Rochester is currently ranked in the middle of metro area foreclosure activity, with a ranking of 169 out of 367 cities. However, the delinquency rate of 7.5 percent is not declining, and that could trigger more foreclosure activity in the near future.

“What’s important to understand is if you have a huge tsunami and it recedes by one foot, you still have a tsunami,” said Ruhi Maker, senior staff attorney at the Empire Justice Center in Rochester.

Maker said she and her staff are not yet sure what to make of all the data, but one thing they can say for sure is the foreclosure crisis has not passed.

“It’s possible that we may be over the worst of it but we still have a long way to go. We still have a lot of delinquencies that will become foreclosures,” Maker explained.

She likened the legal foreclosure glut to a python that “hasn’t spit them out yet.”

Empire Justice Senior Staff Attorney Rebecca Case-Grammatico explained that despite the fact that it’s been 10 months since the Office of Court Administration imposed a mandatory foreclosure document affirmation rule, lenders have still not figured out how to comply with it, resulting in a drastic drop in the number of cases filed. In addition, even if foreclosure cases are filed, lenders are not filing a request for judicial intervention to move the case along.  

Although the need for foreclosure assistance to the public remains high, agencies such as Empire Justice face the grave risk of losing the funding to keep foreclosure assistance programs operating. The loss of funding issues comes at a time when Case-Grammatico says Empire Justice is seeing a lot of people in need of legal foreclosure assistance.

“We’re seeing a lot of people two years behind in their payments, struggling to make ends meet,” she said.

According to Maker, another reason for the delay is that New York Attorney General Eric Schneiderman and other attorneys general are negotiating with banks and lenders on how they want foreclosures to proceed.

“Once they figure out that’s how we want to do it, we may see an unleashing of foreclosures,” Maker said.

An abundance of potential foreclosure cases exist in Rochester and other upstate cities. Rochester’s serious delinquency rate of 7.5 percent ranked 63rd in the country and was up slightly over 2010, according to Foreclosure-Response data released on Tuesday. Buffalo was ranked 50th in serious delinquencies, Syracuse 45th and Elmira was in the top 10 cities nationwide with a serious delinquency rate of 9.4 percent.

Even RealtyTrac Chief Executive Officer James J. Saccacio had limited optimism regarding the statistics his company reported.

“Unfortunately, the falloff in foreclosures is not based on a robust recovery in the housing market but on short-term interventions and delays that will extend the current housing market woes into 2012 and beyond,” he said. 

“It’s too early to say we’ve peaked,” Maker said. “We can’t say we’re done until we have at least two strong quarters of growth and an improvement in unemployment figures.”

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