New York homeowners are still struggling with mortgage payments even as the nation appears to be slowly recovering from the burst of the housing bubble. Nationwide, foreclosures fell 29 percent in February from their level a year earlier, according to RealtyTrac. They also fell 11 percent from January's level. Foreclosure rates now stand at their lowest level since 2007.
However, the number of so-called foreclosure starts, or new foreclosures, went up nationwide, with New York one of the hardest hit. Nationwide, foreclosure starts rose 10 percent February from their January levels. In New York, they rose 139 percent.
Analysts said part of the reason for the promising nationwide numbers was that a number of states have recently begun acting to slow the foreclosure process. New York is not one of these states.
With the job market still weak, and the effects of Superstorm Sandy still apparent, many New York homeowners have fallen behind on mortgage payments. For some it may seem impossible to ever catch up.
There are often ways to stop foreclosure, however. Lenders are sometimes open to mortgage modification or special arrangements to reduce monthly payments. Homeowners may also sometimes arrange a pre-foreclosure sale of the home that satisfies the lender. For those homeowners who qualify, Chapter 13 bankruptcy can also stop a foreclosure.
When financial pressures seem overwhelming, it can be tempting to walk away from a home and allow the foreclosure process to go forward. But before they consider walking away, homeowners should investigate the alternatives to foreclosure. There are many paths to a healthier financial future.
Source: Long Island Business News, "U.S. Home Foreclosures Record Sharp Drop in February; Foreclosure Starts Spike 10 Percent," Rapti Gupta, March 15, 2013