NYC Foreclosures on the Rise

Here’s the latest slice of legislative brilliance: A one year moratorium on foreclosures:

The Bush administration recently announced a plan to delay foreclosures for some troubled homeowners for 30 days. Senator Hillary Rodham Clinton, in the race for the Democratic presidential nomination, has called for a 90-day moratorium on foreclosures.

But two state legislators have been quietly pushing for an even longer reprieve for homeowners in New York State: a one-year moratorium. Assemblyman James F. Brennan, a Brooklyn Democrat, and State Senator Frank Padavan, a Queens Republican, have introduced a bill in both houses that would delay foreclosure proceedings throughout the state for one year. The measure would allow residents to remain in their homes while granting them time to work with lenders to modify their mortgages.

The bill is one of the most far-reaching state proposals to address the crisis in subprime lending and foreclosures, and it recalls the long-term foreclosure moratoriums that provided relief to homeowners in the 1930s during the Great Depression.

Not to be too harsh, but I fail to see how preventing enforcement of contracts and property rights is going to help this situation.

If the government or private foundations want to get more involved, they need to understand what the problem truly is, and craft an appropriate solution (more on this topic later this week).

The charts below are quite interesting: Manhattan Real Estate has been rock solid throughout the entire Housing mess. But I was a little surprised to see how much pressure the rest of the city  has been under:

Foreclosures, 5 Boroughs NYC


There has been no big uptick in NYC foreclosures — mostly due to many high paying corporate and Wall Street jobs still here. That, plus a big influx of European money taking advantage of the weak dollar.

Note: Central Park (white area in red circle) remains foreclosure free!


Bill Would Set Foreclosure Moratorium
NYT, March 3, 2008


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What's been said:

Discussions found on the web:
  1. Ross commented on Mar 3

    No foreclosures in Central Park?

    Don’t tell that to Uncle Billy. Cops came and took away his cardboard box!

  2. BDG123 commented on Mar 3

    Manhattan has missed the mess ………so far…… because Wall Street is in a massive bubble. The rest of the economy has been cratering for well over a year but the financial engine kept on revving. And, it revved right past the real economy. Not the first time we’ve seen that happen. It’ll be the last for some time though. When the financial bubble collapses, the borough of Manhattan will be one of the hardest hit real estate markets in the U.S. I remember the last real estate mess as I was living in NY. It was very bad and this situation isn’t even close.

    Btw, Trimtabs ought to slice spending by wage group and he’d see the only thing that kept the economy revving was the top 5%. That won’t last either. People become rich off of the work of the middle class. That’s not a class statement but a fact. Timberrrrrr.

    It’s really interesting to watch some of the anecdotal data that is so similar to the last time Wall Street was so enamored with its magnificence. During the late 20s there would be lines of cars out to the Hamptons for weekend fun and frolicking. Recently, I read something about a developer wanting to build some kind of tunnel or bypass to ease traffic to ……. you guessed it, the Hamptons.

    Guess what real estate market is really going to crater?

  3. XON commented on Mar 3

    Barry’s instincts are correct. It will require some extremely capricious slicing and dicing of the definitions of property to keep the other side of any of these transactions from invoking the law to shield them from paying out their ill-gotten gains from the fraudulent deals they initiated. . .

  4. Michael C. commented on Mar 3

    I agree.

    If you can’t honor the loan, then give up the property.

    If you can no longer afford a home, then why are you in one and not renting?

    In fact, renting in many parts of the country will actually save you money.

    What is the big deal, and what is all the ruckus about?

    Denial ain’t just a river in Egypt ya know.

  5. PrahaPartizan commented on Mar 3

    Of course, that’s what happens when one evinces a Manhattan-centric point-of-view. I suspect the problems these charts expose accounts for the resistance from the outer boroughs to Bloomberg’s congestion pricing plan supposedly intended to reduce traffic in southern Manhattan. Of course, the plan does nothing to eliminate the traffic indigenous to Manhattan, like the yellow cabs and the black limo trade serving the financial community. Instead, those poor suckers out in outer boroughs will taking the hit, with no guarantee the fees collected by the program will actually be directed toward public transportation as is claimed. Come on out to the outer boroughs and see how many areas look just like Cleveland, Detroit, Buffalo and Milwaukee.

  6. crgj commented on Mar 3

    Crime is definitely on the rise in NYC, especially the outer boroughs, so despite no foreclosures, I wouldn’t be surprised if well-heeled homeowners start their trek back to the ‘burbs from whence they came.

    Time to invest in property in Upper Montclair, NJ and Westchester County?

  7. ramstone commented on Mar 3

    When housing prices fall into the ocean
    Like the mystics and statistics say it will
    I predict Manhattan will still be standing
    Until I leave Murray Hill

    –Desperados under the lease

  8. mtr commented on Mar 3

    The chart shows rates for 2-4 family homes. Is it possible that a relative paucity of such homes in Manhattan limits the foreclosure rates? I guess it would surprise me if the Wall Streeters and Europeans were buying those types of properties in Manhattan. I absolutely agree that they would be the ones buying single-family homes. It would be interesting to see the foreclosure data for those properties.

  9. DonKei commented on Mar 3

    Ah, who cares about foreclosures in NY anyway? Give it a few years and the whole goddamn place will be foreclosed for good by a rising sea level caused by all those schmucks in Jersey driving their SUV’s to the shore, spewing out CO2 from their tail-pipes, nostrils and asses.

  10. Darkness commented on Mar 3

    Aye. The only government intervention that would help is for the administration to increase REAL oversight of financial institutions and quadruple the budgets of the departments that do that. And for congress to put firewalls and regulations in place with the intent that this sequence never ever, repeat itself. Adjusting is what markets do best and they will do that with or without the government’s help. If the government tries to get in the way, the taxpayer will just get burned for it.

    Clinton wants a 90 day delay? What’s she smokin’? The last thing she should be working toward is letting the current administration shove any of this crap onto the next administration.

  11. Paul M. commented on Mar 3

    So, if this passes, I can ‘buy’ a property in NY, preferably with 100% financing, not pay my mortgage, and they can’t throw me out for a year??

    Yippeee, free rent for a whole year!

    And if I take my mortgage payment and buy wheat futures, if it works out, I can bring my back payments up to date at the end of the year, keep any excess and we all live happliy ever after in the land of the Enchanted Forest.

  12. nades commented on Mar 3

    The chart shows rates for 2-4 family homes.

    Good point. I’m really struggling to figure out what multifamily foreclosures have to do with helping out the little people…

    I dont doubt that people need help but lets show a graph of those people… Come on NYT.

  13. Pat G. commented on Mar 3

    Sorry to hear that but I think there’s too many people living there now and maybe it’s time for some of them to relocate.

  14. dumb and dumber commented on Mar 3

    >> a Brooklyn Democrat and … a Queens Republican

    How wonderful!

    Oh, I know the two parties have many differences and that it’s not good to generalize from anecdotes like this. But, please pardon me while I throw up.

  15. Dervin commented on Mar 3

    Well, with the 2-4 homes, it’s worse than you might think. “Extended” Families buy these homes a brother, a sister and maybe a cousin or two pool their money and share a lot of expenses. When I worked in NYC, I knew at least 3 or 4 of these and heard of a lot more. It should also be mentioned they were all immigrant families as well. So going to mom’s basement isn’t really an option.

    But I still think the suspending of foreclosure is doing more to protect the banks and Mortgage companies than the families. The Companies don’t want to try to sell these houses. I don’t think the Laplanders want to spend the summer in their Crown Heights share with some suspender wearing hedge fund Jr. manager. Using this breathing room will give the banks more time to hire another smooth talking shyster to convince the family that this loan is one they can pay back and bankruptcy is something only rich white people should do.

  16. Ben commented on Mar 5

    I saw this wave coming when I was in Florida over a year ago. Im orignally from NYC and I bought an investment condo in West Palm beach that is devastated by the foreclosure madness. I bought for 151k…went up to 181k then now they are selling for 70K. I believe strong cities like NYC and San Fran will take a bit longer but afrom what Im seeing its only a question of time before every city gets hit. Some cities believe they are impregnable to this tsunami…. think again. Florida and California are devastated and its a wave that will reach every inch. My advice GET OUT OF THE MARKET NOW!!!! If you made money… get out and pay off debts and rent.

  17. dave commented on Mar 9

    The charts reflect bb’s congestion pricing plan? Outstanding commentary, that’s a keeper. 2-4 family homes were snatched late in the cycle by spec types according to my felonious Greek mortgage broker. The income feature was going to protect against the downside. Maybe it did, but the rev was eaten by the congestion pricing plan?

  18. wunsacon commented on Mar 10

    I still plan to storm Staten Island and plant the New Jersey flag. (I’ve never been to Staten Island and suspect it’s still up for grabs.)


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