On Foreclosures and Fiscal Cliffs

November 30, 2012 at 7:55 am Leave a comment

imagesIt takes a big blogger to admit when he’s wrong and it appears that this blogger may have been wrong when he predicted that the $26 billion robo signing settlement with major banks combined with new requirements being placed on lawyers in New York State to affirm the accuracy of foreclosure papers would lead to a glut of foreclosures.  So far, the dam has not broken.  As Bloomberg News reports this morning, the number of properties for sale has shrunk to its lowest level in a decade and housing prices nationally are rising at a healthy pace.

Meanwhile in New York, a report released by the State’s Office of Court Administration indicates that the number of foreclosures in New York has risen in 2012, but will not reach the State’s peak set during 2009-2010.  As a result, foreclosure actions continue to represent a significant percentage of the State’s overall caseload, but it appears to be manageable.  One interesting note:  it appears that banks are still having trouble complying with the State’s new affirmation requirements so there still is a large number of shadow foreclosures taking place, those in which the actions have been commenced but no judicial intervention has been requested.

Not surprisingly, if Congress and the President cannot agree on a deficit reduction plan, sending the Country over the dreaded fiscal cliff, the Wall Street Journal points out that this would have an impact on the number of foreclosures being carried out.  The paper points out that one of the reasons foreclosures have declined is that banks have more aggressively turned to short sales, loan modifications and principal reductions as an alternative to more lengthy litigation, but unless Congress agrees by early January federal law exempting income saved on these modifications from a homeowner’s income tax will expire.

NCUA statitstic released

NCUA released a summary of the third quarter 5300 reports.  The news is generally positive.  If I wanted to be a glass half-empty kind of guy, I would point out that the industry’s loan to share ratio continues to languish and that some credit unions are apparently making up some of the difference by aggressively moving into taking on student loans.  While it makes sense to try to tap into this growing industry, not to mention help your members and their kids, these loans are tricky and I wouldn’t be surprised to see them be a point of emphasis when your examiner comes calling.  So, in the immortal words of Phil Esterhaus, let’s be careful out there.


Entry filed under: Compliance, Economy, New York State, Regulatory. Tags: , , , , , .

Eat, Drink and Be Merry. . .to a Point. Should We Foreclose On Grandma?

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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