Staten Island Foreclosure Problem In Sharp Focus
April 14, 2008
Blackford Avenue on Staten Island, tree-lined and filled with newly built two-story town houses worth $300,000 to $400,000, is the epicenter of the Staten Island foreclosure problem.
On two tiny blocks in the Port Richmond neighborhood, eight houses are in foreclosure and five other families have received formal notices from banks informing them they are in danger of the same.
In the first quarter of 2008, 174 foreclosures were filed on Staten Island - the highest per-capita rate of any borough, up from 34 foreclosures in the same period last year, according to data compiled by PropertyShark.com, a real-estate search Web site.
Many of these homeowners took out subprime loans almost $100,000 more than the price of their homes to cover interest payments. Worse still, many did so with hardly any down payment.
The New York Post details the story of Desiree Figueroa and her husband, whose 172 Blackford Ave. townhouse was seized by Option One Mortgage and sold last week. They purchased their home for $445,000 less than two years ago from a developer. Neither had owned property before. “I never thought they’d let me have the house because my husband and I have such bad credit,” says Desiree.
But shock of shocks, the couple was approved for a subprime loan with a down payment of only $5,000. They took out a first and a second mortgage. When home prices in the area dropped, the Figueroas quickly owed more than their house was worth. Six months after closing, they fell behind on the mortgage.
The bank took over the house, and it was resold - for $375,000.
Now the Figueroas - who rent a smaller home across the street at 153 Blackford Ave. for $1,700 a month - are filing for bankruptcy because they can’t pay back the money they owe to the mortgage company.
What the Figueroas didn’t know is that Option One, a major subprime mortgage company, didn’t even own their mortgage when it foreclosed on them. Rather, Option One was merely the servicer for a large investment pool - the pool that really owned the mortgage. Had the Figueroas taken action and defended the foreclosure, they may have been able to force Option One to re-negotiate their loan to a more affordable amount. Even had this not been the case, they could have gained significant additional time in the house without paying their mortgage.
If you enjoyed this post, make sure you subscribe to my RSS feed!
Comments
Got something to say?
You must be logged in to post a comment.