GAO: Prepare for more foreclosures … many more (NY)

I just posted this and SE spit it out! Smart system.

twice nothing = ?

53,000

Thats some serious math.

53,000 for New York STATE. Were you going to include that little tidbit or just ignore that it was there?

"Residents who took out subprime or low-doc loans to buy homes earlier this decade had defaulted or were delinquent on 53,000 loans in New York state through March 31, the GAO said. That dwarfs the 33,000 subprime or low-doc borrowers who had already completed foreclosure proceedings by the spring. At the time, banks had begun the foreclosure process on 28,000 homes backed by subprime or low-doc loans."

Six times higher in other areas? I guess that's some perspective.

"Of course, some other states, such as California and Florida, face even worse problems than New York does. In Florida, the fourth-most-populous state, the proportion of subprime or low-doc mortgages in the foreclosure process is six times higher than New York’s."

Dammit, my home near JFK is going to lose some serious value

"But that will be of little comfort to New York City residents trying to sell their homes in areas already riddled with foreclosures, with more to come. The city’s eastern precincts, already pounded by foreclosures, seem likely to suffer the most. For example, in both the 6th Congressional District, which stretches from Jamaica, Queens, to JFK International Airport, and the 10th Congressional District, which goes east from downtown Brooklyn to Bedford-Stuyvesant and Canarsie, 35% of all active subprime or low-doc loans are deemed seriously delinquent."

> 53,000 for New York STATE. Were you going to include that little tidbit or just ignore that it was
> there?

Ignore? I posted the entire article!

Wow, juice... what's that quote... those who are evil see only the evil...

and, quite some rationalizations, I must say!

"Ignore? I posted the entire article!"

Just thought it would have been appropriate to put STATE in the title of the thread so as not to mislead. You know, just in case someone got the wrong idea.

I'm evil?

evil and backpedalling...

"evil and backpedalling"

LMAO. Coming from the most contentious bastard on this site, I'll take that as a compliment!

53,000 foreclosures for ALL of NY Sate is not really anything to be cncerned about. Plus I am sure the bulk of the foreclosures will be concetraed in certain undesireabe areas.

"53,000 foreclosures for ALL of NY Sate is not really anything to be cncerned about. Plus I am sure the bulk of the foreclosures will be concetraed in certain undesireabe areas."

agree, in manhattan there could be issues with foreclosures of new condo developments, not so much single units. those will be picked up at auction by big investors, not by individuals.

"those will be picked up at auction by big investors, not by individuals."

Or sold unit-by-unit by the foreclosing lender at steep discounts.

It's late amd I'm tired so correct me if/where I'm wrong. The 53,000 number is for the entire state BUT it's for only the first quarter of 2009 - correct???

That's 200,000 foreclosures in all of 2009.

NYC has about 40% of the states population (8MM of about 20MM). Accordingly that could mean that there are about 80,000 foreclosures coming to the city in 2009. 80,000 foreclosures would of course crush the market.

What am I missing here?

JuiceMan, thank you for posting a link to the entire article and I do not think you are evil and backpedalling, I think you are a very caring person who cooks up divine carrot and ginger smoothies.

Back to the topic, I hate to be a wet blanket but I am not at all sanguine about foreclosures in New York City or Manhattan. The anecdotes I hear are troubling. For example I know an investor who bought a very large Tribeca apartment for rent who is bleeding money, underwater on her mortgageS, and she has about a year of cash cushion, she says, to figure out what to do. She's hoping prices will recover by then so she can sell for a price somewhat close to what she paid.

The cats in my office tell me that during the boom, a lot of investors came into Manhattan and bought, also parts of Brooklyn, even though the cap rates suck. And you can deal with that for awhile but a dumb business decision [bad cap rate] can become serious when other elements of your finances get rocky, especially if you're heavily leveraged.

This is a global recession, and in some places it is a depression. Are there going to be investors with cash left to buy packages of condo units at auction? Did y'all know that right now, nationwide, many foreclosures don't even sell at auction? When that happens the property goes back onto the market for next to nothing. When it still doesn't sell, well, in some places in California and Michigan they're getting out the bulldozers. It's cheaper for the bank (now the owner) to bulldoze the house than to try to keep it standing until it sells.

I'm just not sanguine about this. Manhattan is a money magnet and so I think it's safer from market price free falls than many other areas--I think. But Queens? LIC? Most of Brooklyn? Most of Lawn Gyland? I don't see those places as having any magic protective shield. I think we're in for a tough time.

{Manhattan real estate agent.}

Unfortunately for your friend, her cash cushion will run out just at about the same time that the 2-year sublet max at most coops runs out. I wonder how many people dealt with their redundancies by subletting their coops and moving back to Ohio?

tick tick tick tick tick

Is my math correct in my previous post? One thing I didn't consider last night is that the percentage of ownership outside of the city is much higher. So perhaps it's better to say that of the 200,000 foreclosures 20% or about 40,000 units are coming - still though, if true, 40k foreclosures per year would destroy prices.

"It's late amd I'm tired so correct me if/where I'm wrong. The 53,000 number is for the entire state BUT it's for only the first quarter of 2009 - correct???

That's 200,000 foreclosures in all of 2009.

NYC has about 40% of the states population (8MM of about 20MM). Accordingly that could mean that there are about 80,000 foreclosures coming to the city in 2009. 80,000 foreclosures would of course crush the market.

What am I missing here?"

""It's late amd I'm tired so correct me if/where I'm wrong. The 53,000 number is for the entire state BUT it's for only the first quarter of 2009 - correct???"

Jazzman, it is vauge, but I think it is foreclosures this decade. Further down the article it mentions loans originating from 2000-2007, so that is probably the timeframe being reviewed.

I don't think it's a good idea to extrapolate this tidbit to each quarter. As JuiceMan says, the data are a bit unclear here.

Jazzman, you are incorrect.

Yes, NYC has 40% of the population of NYS, but less than 20% of the population of NYC are homeowners. Therefore, you cannot draw a correct conclusion to the number of foreclosures in NYC.

you guys are reading into the low ownership level of NYC all wrong. think about it