More than two years ago, I raised the question of whether another mortgage crash would strike New York homeowners. It’s a provocative discussion because New York City wasn’t seen as representative of the mortgage crash like Las Vegas or Miami. At the time, many homeowners in the New York City metropolitan area had been served pre-foreclosure notices, and it didn’t look like anyone would buy their homes, leading to a wave of foreclosures.
But that didn’t happen, and according to data released biannually by the Federal Reserve Bank of New York, which analyzes trends in regional household debt through 2015, it appears that the percentage of New Yorkers who are significantly behind on their mortgages has fallen precipitously. That’s good news, but many New York City homeowners are still struggling far more than the national average. Here are a few highlights.
- Nationwide, 2.3 percent of American households with mortgage debt are 90 days past due on their mortgages. In New York State, that level rises to 3.8 percent, and in New York City it’s 4.3 percent. Among the five boroughs, only Manhattan beats all others (1.5 percent), and the rest are only slightly higher than the city average except one: the Bronx, which has a 90-day delinquency rate of 7 percent.
- On the bright side, the 90-day past-due rate among homeowners has fallen by about half since mid-2012, when it was 8.5 percent. Back then, nearly 10 percent of Queens and Brooklyn homeowners were that far past due on their mortgages, but in the Bronx the level was nearly 13 percent. Things have clearly improved.
- Mid-2012 was also about the peak for delinquency rates in home equity loans in New York City. Citywide it was about 4 percent, but it’s fallen to 3 percent as of the beginning of this year. Again, Manhattan has led the way with the lowest rate with the other boroughs following close behind the city average, but both Brooklyn’s and the Bronx’s 90-day delinquency rates for home equity loans were much higher, 5 percent and 6 percent, respectively. Again, all boroughs have shown improvement.
- Between 2004 and 2016, the percentage of households in New York City with student loan debt nearly doubled from 8.6 percent to 16.6 percent, which is consistent with national and state trends. Understandably, delinquency rates have risen as well. Nationally, 16.2 percent of households with student loans are 90 days or more delinquent on them, but New York State and the city are doing better, 12.5 and 14.5 percent, respectively. Most boroughs are also doing well in this regard except the Bronx, where the delinquency rate is nearly one in five. This is not good.
In some cases the data here are somewhat “noisy,” but the overall trend is clear: Contrary to the direst predictions, mortgage delinquencies fell and crisis was averted. It’s unclear why things got better for New York City generally, but foreclosures are messy for everyone involved, so there’s nothing for anyone to complain about. Perhaps the city’s economy (or at least its real estate prices) rose enough for distressed homeowners to sell their properties.
The New York Fed’s report addresses all forms of debt, and there’s quite a bit to digest for those who are interested.
Despite the good news presented here, the typical outer-borough New York homeowner is still suffering more than the national and state averages. If that describes your situation, then it’s in your interest to discuss it with an experienced New York bankruptcy lawyer.
For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Brooklyn bankruptcy attorney Bruce Weiner for a free initial consultation.
