Robert Klein Comments on Long Island Foreclosure Spike
On May 10, Long Island Business News published an article titled Foreclosure Spike Coming to LI. In it, Robert Klein, Safeguard’s founder and chairman is quoted commenting on the number of inspections and maintenance work Safeguard performs.
Foreclosure spike coming to LI
Foreclosures are expected to spike on Long Island in coming months as properties protected by moratoriums stemming from Hurricane Sandy storm back into the legal process.
Fannie Mae and Freddie Mac ended a temporary ban on foreclosures in Nassau and Suffolk counties on April 30.
Voluntary foreclosure moratoriums at banks like Wells Fargo followed suit, setting up a coming wave of legal actions against delinquent homeowners.
“There’s going to be more volume coming through,” said Todd Yovino, owner of Hauppauge-based Island Advantage Realty, which helps banks maintain and market foreclosed properties. “What does that look like? It’s going to be considerably more than we’ve seen for the past two years.”
The post-moratorium increases come on top of rising foreclosure activity nationwide as the legal system gets back to work after the $25 billion robo-signing settlement signed last April.
“When we look at the data in Nassau and Suffolk we’re seeing increases in foreclosure activity,” said Daren Blomquist, vice president at Irvine, Calif.-based RealtyTrac, an online real estate data tracker. “In March, we saw some of the biggest increases we’ve seen in foreclosure activity. Most of the increase was in the new foreclosure filings, properties starting the foreclosure process.”
Foreclosure activity in Nassau increased 5 percent last April after 13 months of declines and rose in 10 of the 12 last months, culminating in a 132 percent surge in March to 794 foreclosure notices, up from 328 a year earlier.
The numbers increased slowly in Suffolk over the past year, before a 303 percent spike in March to 1,222 properties in foreclosure from 303 a year ago.
“We expected this increase, ever since the robo-signing scandal came to light,” Blomquist said. “Maybe the reason we’re seeing the bigger increase now is there were a lot of loans the lenders couldn’t foreclose on. They had to make sure they crossed their t’s and dotted there i’s.”
More than 25,000 loans are in various stages of foreclosure on Long Island and more than 17,000 local homeowners are 90 or more days delinquent, according to New York State Attorney General Eric Schneiderman.
“The number of foreclosures across Long Island is troubling, but this isn’t just a matter of numbers,” Schneiderman said. “Each foreclosure represents a devastating loss for families and communities.”
As announced this week, the state plans to sue Bank of America and Wells Fargo for not processing refinancing requests promptly, one reason for the increasing foreclosures.
Wells Fargo, meanwhile, said it’s committed to complying with the national mortgage settlement and has helped more than 70,000 homeowners through that program.
“It’s unfortunate that the New York attorney general has chosen this route rather than engage in a constructive dialogue through the established dispute resolution process,” said Jim Hines, a Wells Fargo Home Mortgage spokesman.
About 1.5 million U.S. properties were in the foreclosure process or repossessed by the bank in the first quarter of 2013, up 9 percent from a year ago, according to RealtyTrac.
Bank of America holds 11 percent of mortgages in foreclosure, while Wells Fargo has 10 percent and Chase has 7 percent, according to RealtyTrac.
“The timing is great, because the real estate market is healthy,” Yovino said. “It’s a good time for the banks to be able to shed some for this legacy debt from their books.”
The increase in foreclosure activity does offer a silver lining for firms involved in the process, including landscapers, home contractors and inspection companies.
Ohio-based Safeguard Properties, which monitors and maintains properties for banks, does 1.8 million inspections a month involving properties on which mortgages are 45 days behind.
“Even before the crisis, we were performing 700,000 to 800,000 inspections a month,” said Safeguard Chairman Robert Klein. “Now that doubled.”
Klein said banks are hiring his firm not only to inspect, but to hire contractors to mow lawns and perform other maintenance.
“We’re maintaining more vacant properties, which is a good thing,” Klein said. “Otherwise, these would be sitting there, becoming bigger problems.”
Properties heading from limbo to sale are also creating work for contractors as the banks seek to increase curb appeal for buyers.
“Everyone’s going to get a little bit busier, from the guy who installs the carpet to the engineers and attorneys,” Yovino said. “From bathrooms and kitchens to siding and roofing.”
While buyers may snap up properties at discounts, a healthier real estate market means deals won’t be as good as they were a few years ago.
“There’s always opportunity,” Yovino said. “I think the bigger opportunity has passed. There’s a lot more consumer confidence right now. As a result, people are paying greater numbers.”
And those eager to scoop up a foreclosure property may find that the deal isn’t always as attractive as it appears.
“There’s a lot of risk involved,” Yovino said. “Unless you really know what you’re doing, there’s a lot of liability. You need to know if the property’s occupied. Are you willing to sit a year for an eviction? That’s how long it takes.”
To view the online article, please click here.
Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders, and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally. Website: www.safeguardproperties.com.