NY Foreclosure Auctions Jump In 2017: Report

New York is one of just a handful of states that saw a jump in foreclosure auctions in 2017, according to a new report. Its findings suggest that the state's aggressive attack on zombie properties is beginning to pay off.

New York bucked the national trend, seeing an increase in foreclosure auctions of 9 percent over 2016 — almost double (74 percent) what had been scheduled in 2010 at the peak of the housing crisis, according to ATTOM Data, a multi-sourced property database.

"It's exciting to see those results," said state Sen. David Carlucci (D-Rockland/Westchester). "It was the intent of the legislation we passed in 2016 to move zombie properties back on the market. Hopefully this is something the rest of the nation will follow."

Nationally, 50 percent of all loans actively in foreclosure at the end of 2017 originated between 2004 and 2008.

“Thanks to a housing boom driven primarily by a scarcity of supply, which has helped to limit home purchases to the most highly qualified — and low-risk — borrowers, the U.S. housing market has the luxury of playing a version of foreclosure limbo in which it searches for how low foreclosures can go,” Daren Blomquist, senior vice president at ATTOM Data Solutions, said in a press release about the 2017 data.

The issue of "foreclosure limbo" has angered many communities and politicians in the Hudson Valley.

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New York officials started taking action in 2015 to reduce the number of “zombie properties” locally, culminating in a state law and new regulations in 2016 requiring banks to maintain properties in foreclosure, creating an electronic registry of abandoned properties and a hotline for people to report deteriorating homes in their neighborhoods, and setting up penalties of $500 per day for banks that don't properly maintain their properties in foreclosure.

The state needed to act because cities, towns and villages are hampered by antiquated laws that make it difficult for them to discern the true owner of a zombie property, said State Senator Terrence Murphy (R-Westchester/Putnam/Dutchess), releasing a report in 2016 called "The Great American Bank Robbery: 40th State Senate District and Putnam & Dutchess Counties" that detailed over $6 million in property value depreciation resulting from poorly maintained bank-owned homes and "zombie properties" just in those two counties.

"These zombie homes not only prove to be an eyesore in our communities but pose real dangers to our neighbors and children,” Murphy said at the time. “It is not unreasonable to hold big banks accountable to properly care for and maintain the properties under their ownership in the Hudson Valley."

In 2017, one of the Hudson Valley's Congressional representatives, Sean Patrick Maloney (D-18), said he would push a national plan called Housing Our Heroes that would create a pilot program within the Department of Veterans Affairs. It would provide federal investments to Veterans Service Organizations (VSOs) to acquire and update blighted properties to provide housing for homeless veterans.

Only five other states saw jumps in foreclosure auctions: Vermont, Connecticut, Oklahoma, Louisiana and Maine.

Meanwhile, New York followed the national trend in foreclosure starts last year, dropping 18 percent compared to 2016 and 34 percent compared to 2010, which was the height of the housing crisis. So did the counties in the lower and mid-Hudson Valley.

• Westchester had 1,503 foreclosure starts in 2017 compared to 1,645 in 2016. Its worst years in the past decade: 2009 with 2,407 and 2013 with 2,604.
• Ulster had 557 compared to 438 in 2016. In the past 10 years, the most foreclosures starts in Ulster were in 2015 - 728.
• Rockland had 811 foreclosure starts compared to 942 in 2016. Its worst year was 2013 with 1,400 starts.
• Putnam had 419 foreclosure starts in 2017 compared to 402 in 2016. The worst year for foreclosures in the past decade was 2013, when there were 545.
• Orange had 1,177 in 2017 compared to 1,530 in 2016. In the past 10 years, the most in Orange County were in 2016.
• Dutchess had 388 foreclosure starts in 2017 compared to 512 in 2016. The height for Dutchess in the past 10 years was 2013, with 1,105 foreclosures started.

Nationally, foreclosure filings for 2017 fell 27 percent compared to 2016, reaching their lowest level since 2005, according to the report. There were 676,535 properties with foreclosure filings in 2017, a 76 percent drop from when such filings were at a peak during the housing crisis in 2010.

New York was ranked 11th among all states for its rate of new foreclosure filings for 2017, according to a new report. The rest of the tri-state region was at the top of the rankings: New Jersey had the highest foreclosure rate. Connecticut was ranked No. 5.

The properties with foreclosure filings in 2017 represented just one-half of one percent of all U.S. housing units, the report said. When filings were at a peak during the housing crisis, they represented 2.23 percent of all U.S. housing units.

In 2017, lenders started the foreclosure process on 383,701 properties and 48,066 of those properties were in New York, according to the report.

Along with New Jersey, Delaware, Maryland, Illinois and Connecticut had the highest foreclosure rates in 2017.

South Dakota, North Dakota, West Virginia, Montana and Mississippi had the lowest rates of foreclosure filings in the U.S. for 2017, according to the report.

The foreclosures report is based on publicly recorded and published foreclosure filings collected from more than 2,500 counties nationwide.

You can read the full report from ATTOM Data here.

PHOTO: Mount Vernon NY razes a zombie property/ Mount Vernon Mayor's Office