Personal Finance and Money Management

New York home foreclosures continue to surge in the multifamily sector as more and more owners of affordable housing complexes face severe financial troubles, particularly in Brooklyn and in the Bronx.

According to Harold Shultz, senior member of the Citizens Housing and Planning Council, there are around 100,000 apartment units across New York City whose owners are delinquent or are already facing foreclosure lawsuits.

Rafael Cestero, head of the New York City Department of Housing Preservation and Development, more than 10 percent of the 1 million rents-controlled apartments in the city are in severe financial distress and more than 25 percent of these distressed buildings have deteriorated sharply since the start of the downturn because of lack of funds to do routine maintenance work and make needed repairs.

Recently, the decision of a team of investors to give up ownership of the 11,000-unit Stuyvesant Town and Peter Cooper Village, the largest affordable housing complex in the entire city of New York, when they could not raise money to pay their loans, was a sharp blow that highlighted the severe problems of affordable housing owners in the city.

Last year, the pace of New York home foreclosures rose by 7.2 percent from 2008 and by 68 percent from 2007.

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Foreclosure mediation is an excellent process to take a horrible thing like a foreclosure and make it right for the bank and for the homeowner.  This process works by allowing the lender collect money owed, the homeowner to keep their home, and an agreement to be made on payments that are fair for both parties involved.

Many people have purchased homes they really couldn’t afford the payments to and went into foreclosure.  The foreclosure mediation program is designed as a way to protect people from losing a home and help the banks limit the number of foreclosure properties they are stuck with.  When you go through foreclosure mediation, you will meet in court and with the lender to come up with a way to pay back the arrearages.  Often times, the lenders are willing to give you a new payment plan for the arrearages but the judge will be the person to determine what is going to happen.

When you go through foreclosure mediation you will get to keep your home if you want to.  If you were given an unrealistic loan by a lender and told you would be able to afford it but the interest rates shot the payment too high to be able to afford, then you will have options.  The laws have made this process available to people just like you.  Don’t worry about losing your home.  Come to mediation with your proof of income and a determination of keeping your property.

In most cases, when people go through foreclosure mediation and they want to keep their home, they get to.  The judge, you, and the lender will come up with an entirely new loan the bank is happy with, that has payments you can afford, and everyone will be in agreement.  Walking away happy is not always the case when people go to mediation.  You must have a plan in place and verbally express to the lender how willing you are to save your property.

Foreclosure mediation is a process designed due to the millions of home loans given to homeowners that were unrealistic and impossible to pay on when the interest rates spiked.  This process helps people who agreed to balloon mortgages and did not know how their monthly payment could double.  Mediation allows the homeowner to keep their property.  It saves the bank from losing the funds from another loan and it makes everyone involved happy with the outcome.  In every mediation, not everyone walks away satisfied.

Denver home foreclosures slowed in 2009, in contrast to the upward trend of Colorado foreclosures, based on data from the state Division of Housing.

Last year, foreclosure filings statewide surged to 46,394 after holding steady below 40,000 in 2008 and in 2007. In contrast, filings in Denver County, which was one of the most battered Colorado counties over the past years, dropped by 28.8 percent in 2009 compared to 2008.

Similarly, in the final quarter of 2009, the pace of home foreclosures in Colorado surged, but the pace in metro Denver slowed.

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If you have missed a few payments and your house goes into foreclosure there are a few things you can do. The most important thing you need to do is remain in touch with the bank at all times. No matter how annoying the lender seems to be and no matter how many times you have repeated your story to the bank, keep talking to them.

If you have missed a few payments on your mortgage and received a notice of default, don’t panic. Many people panic because they think their home is now lost and there is nothing they can do. They cut off communication with the bank and think the bank is coming after them for the full amount of the loan after they kick them out. You don’t have to move out of your home as soon as the foreclosure process occurs. Answer the phone when your lender calls or pick up the phone and call them. Tell the bank exactly why you have missed a few payments and be clear to them you want to keep your home.

The bank will work with you if you tell them you want to keep your home and you do everything you can to get caught up on the payments. If you are unable to get caught up on the payments and you know you are going to lose your home then there is still a process that must be followed legally. The process of a foreclosure will take from six months to a year to complete. Don’t pack up and move out right away. Use this time to save up as much money as you can before you have to move out of the home. You have up until the date of the auction to live on the property and no one will remove you from the property until then.

If your house goes into the foreclosure process, you can still stop a foreclosure from appearing on your credit report. Put your home up for sale and see if you can sell it. If you can sell the property for the amount you owe on the loan then you will be in good shape. Ask your bank if they will agree to a short sale. You might also ask about a deed in lieu. These are options you might choose from to stop a foreclosure from appearing on your credit report.