http://www.crainsnewyork.com/article/20090728/FREE/907289972

The deluge of home foreclosures swamping New York is nowhere near over, a report from the U.S. Government Accountability Office shows.

The GAO study released Tuesday predicts that the number of foreclosures on homes backed by subprime or low-documentation mortgages could easily double in the coming months or years, which could put tremendous pressure on housing prices throughout the city and suburbs.

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.

The bleak data are part of a national survey of “nonprime” mortgages prepared for Congress by the GAO. The study shows just how sloppy mortgage originators became during the housing boom. Of the 14.4 million mortgages provided between 2000 and 2007 to U.S. consumers with tarnished or poorly documented credit histories, 1.6 million had been foreclosed as of March 31, another 600,000 were in foreclosure proceedings and another 1.3 million were “seriously delinquent,” the GAO said.

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.

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.

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