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A report tracking the rates of property foreclosures in New York state showed the the city was not impervious to the wave of distressed homeowners that is sweeping the rest of the country. Staten Island was the only borough that displayed a decrease in the rate of its foreclosures (6%). Leading the boroughs with foreclosure increases was Queens (126%), followed by the Bronx (56%), Brooklyn (51%), and Manhattan (12%). We published this map of city foreclosures back in March.
The report was released just days after an article appeared in The New York Times, describing the New York real estate market's seeming resistance to any type of downturn, where property values have continued to soar as other regions falter. That Times article appeared just two days after the paper ran a piece on how the ailing mortgage market was putting a strain on homebuying in Manhattan, as banks were requiring lenders to provide more of the purchase price for a property up front or pay a higher interest rate on their mortgages.
The probable reason for the recent increase in foreclosures is the fact that the soaring NYC real estate market made making highly leveraged loans to borrowers with even less-than-perfect credit appear to make sense. These subprime loans often involved repayment plans that only covered the interest portion of the debt that didn't allow borrowers to accumulate equity, or quickly exposed the borrower to increased required payments with a rise in interest rates. The easy ability to borrow large amounts of money helped fuel the boom in property values in NYC, but it also left both borrowers and lenders highly vulnerable to adverse economic changes in circumstance, and the result has been the recent increase in loan defaults. Nationally, the foreclosure rate is up 93% year over year.
U.S. Senator for NY Chuck Schumer is warning that New York is not immune to the subprime lending crisis and has introduced legislation that would allow homeowners in trouble to take out more loans or restructure their loans to prevent foreclosure. The legislation involves setting up a national regulatory system for mortgage brokers, eliminating "liar" loans that have little chance of ever beeing repaid by a borrower but generate broker fees, and establishing a task force to aid homeowners who are in distress.
(Image from Sell Your House BEFORE THE CRASH!, by Jimmy Legs at flickr)
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Chuck Schumer is the quintessential politician that only discovers a problem after it's too late. What a jackass.
U.S. Senator for NY Chuck Schumer is warning that New York is not immune to the subprime lending crisis and has introduced legislation that would allow homeowners in trouble to take out more loans or restructure their loans to prevent foreclosure.
If someone can't pay back their loan, why would you loan them more money? I just don't get it.
#1... couldnt have said it better myself. these guys come trotting out to look like they are doing something after the disaster has taken place. BTW, we shouldnt be bailing out anyone who took risks they should not have, both on the individual level and on wall street. if you signed up for a loan that was too good to be true and failed to read the fine print, you get what you deserve.
Didn't any of these banks/lenders do credit checks? I mean seriously... what the fuck?
The lenders and banks are mostly to blame for this "crashing market" and I also blame the people who can't afford their mortgages... they all obviously live beyong their means.
Which by the way, together, they have fucked anyone who owns a house or apt, property...
edEx, feel free to throw in the hedge funds and lousy ratings job of S&P and Moody's.
Don't go blaming the Politicians for this mess ! There not the ones who forced anyone to try buying homes here . It's squarely on the shoulders of the homeowners ! Bottom-line, If Ur going to take a risky chance like this, You have to expect the chances of failure greatly increase . That's the problem with some folks, They can't seem to grasp the common knowledge that their are consequences for the actions taken . It's just sad that those homes that fall into default will end up the responsibility of the taxpayers . Posted by; "Still Not Amused"
No, you can't simply blame the homeowners. They got in over their heads and legally should lose their property. But in no way should we have to bail out the lender for being stupid as well. They should be forced to take the loss as well. If they get a bailout it should be on the condition that they first use their bonus pool before they get a dime of government money. And then they have to pay back the government out of next year's bonuses. And the year after that.
Hey, a comment is missing.
darn.
The day of reckoning is near.
I don't feel sorry for the people who will have to suffer through foreclosures. If you bit off more than you could chew, it's your own fault.
This is what you get for destroying neighborhoods with your pseudo-upscale lifestyles. Welcome to the free market. YOU GET WHAT YOU DESERVE.
Karma's a bitch.
does this mean there will be less banks and realty offices in park slope?
The title of the article reminded me of a Morrissey song. Interestingly, also about debt.
8: Because it probably contained one of this sites gleamingly racist posters making some kind of snarky comment about black people and the Bronx.
That's where the good money is.
-Ph
#12 Actually, it concerned another ethnic group that plays a prominent - and I would use that term very loosely - role in the financial industry..
Geez, "snarky" is actually a word? I see someone spent a lot of time with grammy growing up..