Westchester Guardian/Catherine Wilson.

Thursday, September 4, 2008

Catherine Wilson, Bureau Chief
Northern Westchester


Losing Our Homes

According to the New York State Court System, since 2005, foreclosures have risen 150% statewide and are expected to increase another 40%
in 2008. Some neighboring counties, such as Suffolk and Queens, have seen their foreclosure rates increase, in this time period, by 269% and 223%,
respectively. Westchester County is not that far behind. In the same period, foreclosures in our county have increased by 184%.

The situation has become so serious that the court system announced on June 18 that it had established a “Residential Foreclosure Program”
designed to specifically assist in case resolutions. This program includes:

• A court notice describing the Residential Foreclosure Program and providing contact information for locally available legal and mortgage
counseling services.

• Information to homeowners and lenders that an early conference is available to explore whether the case can be resolved without further
court action.

• Case information available in automated form for service providers to assist them in contacting the Losing Our Homes parties to provide legal and financial counseling.

• Two rounds of notice to the homeowner: the first provided by the plaintiff as part of the summons and complaint, and the second sent by the
Court when the plaintiff files proof of service and a special Foreclosure Request for Judicial Intervention (RJI).

The Chief Judge of the Court, Judith Kaye, hopes that this program will reduce the length of foreclosure proceedings by as much as 15 months.
As Judge Kaye noted in her press release on June 18, this will ultimately benefit “not only the parties directly involved, but also the neighborhoods
that would otherwise be left destabilized by these vacant properties. The program serves the best interests of all New Yorkers by reducing hardship,
cost and neighborhood blight in our hardest-hit communities”.

Some of Westchester’s communities are indeed hit hard by the housing crisis. A review of the current homes, either in foreclosure or facing foreclosure in Westchester, reveals a total of 806 homes in jeopardy, stemming from a variety of circumstances:

Foreclosures ..........116 properties
Preforeclosure ......117 properties
Bankruptcy ...........447 properties
Other .....................126 properties

But when the above numbers are reviewed by location, an even more alarming picture appears. As expected, those communities with lower
income levels are indeed hardest hit. But one community, which has seen tremendous development in recent years is also experiencing the greatest
number of jeopardized homes, White Plains. The communities with the highest number of these homes alphabetically arranged are:

Mount Vernon ........ 83 properties
New Rochelle .......... 25 properties
Ossining .................. 23 properties
Peekskill .................. 28 properties
Port Chester ............ 28 properties
West Harrison ........ 19 properties
Yonkers ..................101 properties
White Plains .........321 properties


At a time when White Plains has been embracing development from Louis Cappelli and Donald Trump and encouraging multi-million dollar
projects and homes, it has also been experiencing a record-breaking amount of foreclosed properties and bankruptcies. White Plains now has million-dollar penthouse suites in elite towers with Hudson River views. But at what price? How many White Plains families had to lose their homes to accommodate the wealthy? And what is White Plains doing to help their working families stay in their homes?

The reasons for the discrepancies between communities can be partially explained by how each community deals with a property in jeopardy.
Many of our local towns are not reporting a high number of tax-related foreclosures; for example, because it is their policy to work with the homeowner and not toss them out into the street.

Ms. Paula DiSanto, the Village Clerk of the Village of Croton-on-Hudson, reported to the Guardian that it was the Village’s policy not to foreclose on homes. Croton-on-Hudson is seeing an increase in the number of their homeowners unable to pay their property taxes. In 2006 they had 13 defaults on payments for a total of $17,117.66. That rose to 34 so far in 2008, for a total of $76,245.65.

While the homeowners may feel comforted that the Village will work with them, it still means that the Village has lost a total of over $100,000
in tax revenues in the past three years; revenues that will now have to be obtained from other sources.

The Town of Bedford also cooperated with the Guardian’s FOIL request for information on their tax liens and defaults. Likewise, they were
sensitive to their homeowners’ needs. Town Clerk, Lisbeth Fumagalli, specifically informed us that, while the homeowners’ addresses and names
were public record, she was requesting that the Guardian not reveal this information; a request we are happy to honor.

Homeowners can default on payments due to a variety of reasons – medical issues, loss of employment, family changes, death, and economic
and business downturns. While some homeowners are indeed facing foreclosure due to their own foolishness, many are facing other dire situations
as well that have now placed their homes in jeopardy. Many of the communities the Guardian spoke with on this issue were extremely sensitive
to the problems being faced by these homeowners and stressed respect for their privacy. We concur.

Bedford is currently faced with over $954,000 in tax liens, including penalties. As a result, the town has had to take the step of requesting judicial
intervention for payment of the oldest of these liens – the ones dating back to September 1, 2003. After five years, there is little hope the homeowners will be able to pay what is owed the Town, leaving Bedford with little recourse but to request court involvement.

The Town of New Castle has also seen dramatic increases in delinquent taxes in the past three years. In 2005 they had 21 delinquencies totaling $62,511.70. That increased to 40 properties totaling $318,970.04 in 2006 to a dramatic 77 properties totaling $885,378.80 in 2007. Ms. Patricia
Antonucci, the Deputy Receiver of Taxes for the Town of New Castle, noted that the average delinquent tax was $4,583.18 and the Town has not
foreclosed on any property within the last three years. Antonucci provided the Guardian with New Castle’s policy for collecting taxes:

“The current tax year must be paid first and then the delinquent taxes (liens) are paid in reverse chronological order.

A taxpayer may enter into an installment agreement with the Town to pay delinquent tax liens. In order to enter into an agreement, the property must be the taxpayers’ primary residence.

That last sentence is one of the reasons why foreclosures are higher in lower income communities; these communities have a higher concentration
of rental properties. While our local towns and villages are willing to work with homeowners so they may stay in their homes, given the dramatic increase in tax defaults, the local tax collectors cannot afford to extend the same policy to landlords.

Regardless of the nature of the tax defaults, the impact on our communities is the same – there are fewer tax dollars being collected. Foreclosed
and abandoned homes reduce the property values for the remaining homes in the area, thereby reducing the tax base even further and placing
an even greater strain on the remaining homeowners.

Furthermore, when either a landlord or a homeowner defaults on their local tax payments, the children of the homeowners’ or the landlords’
tenants are now attending local schools without contributing to the school tax base, placing another burden on remaining taxpayers.

While the communities can leverage a homeowner’s property to recover taxes owed, there is little a tax collector can do to recover payment
from rental properties owned by a defunct corporation. Those monies are lost forever.

Currently the recovery process can take years, as seen in Bedford’s situation. The Town is only seeking recovery of taxes on payments that
are over five years old; payments that may never be recovered. However, in the case of individual homeowners, the economic impact to the community is limited, especially if the homeowner has no school-aged children.

However, in the situation of rental properties, the economic impact is multiplied due to the size of the property and the number of tenants
involved. The tenants and children of those tenants continue to receive educational and other local benefits while the landlord evades his/her obligation to provide the communities with the portion of their rent that represents local property taxes to pay for those services. In addition, the time frame to deal with the recovery of the taxes due is extended since the courts have to deal with leases and tenants’ rights. As a consequence, the local community goes without payment for services provided even longer.

While Judge Kaye’s Residential Foreclosure Program addresses the tragic situation of individuals losing their homes, it does not address the more critical impact of landlords defaulting on their payment of local taxes from monies they already collected from their tenants. The process
to recover such payments must be speeded up since these foreclosures and defaults have a far greater impact on our local communities. White
Plains is currently dealing with 321 jeopardized properties. How can one small city absorb such a loss of revenue? How will their schools survive?
And how can their remaining homeowners pick up the slack?

One of the major developers of White Plains, Donald Trump, has already noticed this situation and addressed it. He is currently selling a book entitled “Real Estate Goldmine: How to get rich investing in pre-foreclosures,” and teaching foreclosure investment strategies in his “Trump
University”. He has millions earned from his “Real Estate Wealth” expos with the Learning Annex; all while the neighbors of his local developments are losing their homes.

For local homeowners facing the loss of their homes, the court program is only operating in Queens at present. The full program, along with court rules and time frames governing foreclosures, are detailed on the New York State Unified Court System website.

Homeowners should realize that lenders want to avoid foreclosure as much as they do, especially in a poor real estate market. The most important
first step for a homeowner to take is to hire an attorney experienced in dealing with foreclosures, and, secondly, to talk with the mortgage companies and tax assessors.

As we saw with local villages and towns, most want to work with homeowners and are willing to work out installment agreements. Sadly, there are many individuals willing to take advantage of a homeowner facing foreclosure. Westchester County Department of Consumer Protection provides advice to homeowners, along with information for free legal services and counseling services.

That information may be accessed on the County’s website at http://www.westchestergov.com/consumer or by calling the federal Department of
Housing and Urban Development at 1-800-569-4287.