Bronx Foreclosure Homes to Rise Due to Late Loan Payments
Bronx Foreclosure Homes to Rise Due to Late Loan Payments
Market data showed that more and more homeowners in New York City are defaulting on their mortgage payments in the second quarter of this year. As unemployment continues to rise, its effect is also spreading especially among homeowners with mortgages.
From April to June, the mortgage delinquency rate in the city jumped to 11.7 percent to 234,254. The figures represented an increase of 10.5 percent compared with the first quarter figures.
Industry experts are concerned that the growing mortgage delinquency rate in the city would further pull up the number of Bronx foreclosure homes. The borough of Bronx is the poster child of foreclosure in the city.
In the first quarter, the number of foreclosure notices filed in Bronx totaled 580, already twice the figures posted by the borough in the whole of 2008.
Statewide, first quarter foreclosure rates peaked at 803,489, representing an increase of 9 percent compared with figures in the last quarter of 2008 and 23.6 percent higher compared with first quarter the previous year.
Industry experts said that the first wave of foreclosures was attributed to the collapse of the subprime market, which they also blamed as the factor that triggered the recession. However, this time around, industry experts said that the unabated rise in unemployment made it hard for homeowners to meet their monthly mortgage payments.
And what is more alarming according to experts is that a large number of distressed homeowners are holders of prime, fixed-rate mortgages. Data released by the Department of Labor showed that the unemployment in the state was 8.6 percent last month.
Experts said that the current trend is a confirmation of a shift from a crisis driven by kinds of mortgage loans to one that is aggravated by a shift in the economy.
The loan delinquency rate in the state involving adjustable-rate mortgages dropped from 28.3 percent to 27.8 percent while the delinquency rate involving prime mortgage loans rose from 4.1 percent to 4.7 percent.
But a report released by the U.S. Government Accountability Office showed that the number of repossessed homes insured by subprime loans could increase twice in the coming months, from the current total of 55,000 as of second quarter.