WNYLC Foreclosure Study Years 2007-2008 - Anti

Transcription

Foreclosing Erie County
Erie County, NY Foreclosure Study: Years 2007-2008
Western New York Law Center, 2009
Foreclosing Erie County
Kathleen A. Lynch, Esq.
Holly D. Lindstrom
Kirk R. McLean
Graham S. Leonard
Daniel I. Kresse
July 9, 2009
Western New York Law Center, Inc.
237 Main St. Suite 1130
Buffalo, NY 14203
716.855.0203
www.wnylc.net
www.buffaloflipping.com
WESTERN NEW YORK
LAW CENTER
www.wnylc.net
[i] Introduction
The Western New York Law Center (WNYLC) undertook the task of conducting this Foreclosure
Study to address the need for complete and accurate information pertaining to foreclosure initiation
activity in Erie County. This study was designed to capture every foreclosure initiation in Erie County
in recent years. This first edition of the study focuses on foreclosures initiated in years 2007 and 2008.
The source of this information is public records filed at the Erie County Clerk’s office. The challenge
in producing this study lay in examining thousands of electronic and hard copy documents for relevant
information and linking key pieces into a usable format to produce this analysis.
In order to fully comprehend this challenge, one must understand that no comprehensive foreclosure
database exists on a state or national level. While there is mandatory reporting of loan origination by
certain financial institutions required under federal law for regulatory purposes, the federal government
does not routinely collect foreclosure data. This makes a comprehensive national analysis of the
impact of foreclosures logistically impossible. Nor can this type of study be conducted at the state
level for the same reason. Therefore, we have endeavored to conduct this analysis at the county level
where foreclosure initiations are recorded pursuant to state law.
The detailed information compiled in our underlying database further distinguishes this study from
other sources that report on foreclosure initiations. Our research contains information related to the
original mortgage transactions including borrowers, lenders, property addresses, corresponding interest
rates, any attached riders or filed assignments, and other pertinent information. Generally, most
publicly reported foreclosure information is not presented in detail. This information is typically
derived from voluntary and private reporting by lenders to industry sources (CoreLogic) or from a
combination of undisclosed and incomplete sources (RealtyTrac).
Private and governmental entities use a variety of measures to report on foreclosures. The foreclosure
processes vary in judicial versus non-judicial states, further complicating the discussion. In a judicial
foreclosure state, the lender must start the foreclosure process through the court system. In a nonjudicial state, the lender does not have to involve the court and can simply alert the borrowers that
they are in default and advertise their intent to sell the properties at auction. In non-judicial states, a
notice of default, notice of sale, or deed transfer might be used as a measure to count foreclosures. In
judicial foreclosure states, the measures might include lis pendens, judgment, or deed transfer. Failing
to distinguish between different measures of foreclosure in dissimilar foreclosure processes can result
in duplication or inaccurate reporting. For example, measuring lis pendens in one state versus notices
of default in another state would lead to inaccurate conclusions. Similarly, if you measure lis pendens
in one county versus judgments in another county within the same state, the comparison would again
be inaccurate. Furthermore, the absence of a comprehensive foreclosure data source leads to
incomplete analysis and reporting. This combination of factors presents a challenge when trying to
ascertain the impact of foreclosures on a municipal, state, and federal level. It limits the usefulness of
many sources when attempting to identify foreclosure trends among municipalities across the nation.
Consequently, many reports are neither uniform nor comprehensive and can produce misleading
[i] conclusions. By comparison, this study uses one common measure—initiation by filing of lis pendens
in Erie County.
Another factor to consider is that not every entity that originates a loan is required to report their
lending activity under the federal Home Mortgage Disclosure Act (HMDA). For instance, we learned
that in Erie County nearly half the mortgages filed are not reported under HMDA (see Exhibit A).
Therefore, unregulated lenders can escape scrutiny until after the foreclosure process has already
begun. Once a lis pendens is filed, however, we can access this information. This study provides a
clear picture of foreclosure initiations by lis pendens filings in Erie County.
While the WNYLC’s foreclosure study serves to present a total picture of actual foreclosure initiation
activity in Erie County, we recognize that even our analysis does not present a full picture of all
borrowers at risk of foreclosure in Erie County. Public records are simply not available for borrowers
that are delinquent on payments or in default but have not yet seen a foreclosure initiation by the filing
of a lis pendens. Still, we believe that this study is very useful for several reasons.
While analyzing property transactions as a coordinating partner on the Mayor’s Anti-Flipping Task
Force (AFTF), data researchers at the Western New York Law Center found that nearly fifty percent
of houses that are flipped in Erie County came from foreclosures. In an effort to capture a more
complete picture of the real estate landscape in Western New York, WNYLC spearheaded this
initiative to create a database of every single mortgage and/or property entering foreclosure in Erie
County. Partnering with the Western New York AmeriCorps VISTA program, the WNYLC started
recording and analyzing data derived from complex public records searches and linking up foreclosure
initiations with the mortgages, summons and complaints, deeds, and other court actions associated
with the foreclosure. This project enables us to detect trends of foreclosures related to flipping by
tracking parties who are buying and selling foreclosed properties.
In an effort to curb flipping as well as abusive, predatory and illegal lending practices, we partner with
regulatory and law enforcement agencies by providing our data to them and responding to research
inquiries relating to our study.
This study enables us to present useful information to municipal leaders, elected representatives at
every level of government, community leaders, non-profits and any other parties or individuals dealing
with the impact of foreclosed, distressed and abandoned properties.
As a legal services agency, we are committed to assisting homeowners facing foreclosure. This
research has allowed us to focus outreach on affected borrowers and neighborhoods. We partner with
area housing counseling groups, legal services agencies and other interested parties to ensure that free
counseling and legal services are available to these homeowners.
Through this report, we intend to present an accurate and complete picture of foreclosure initiation
activity in Erie County, New York. We hope that this information will be used as a tool to reduce the
number of foreclosures occurring in Erie County.
[ii] Erie County, NY Foreclosure Study: Years 2007-2008
Methodology
In order to capture all the information needed to produce this report, researchers accessed records related to
lis pendens filings (notice of pendency of foreclosure action) from the Erie County Clerk's Office.
Key pieces of information were collected from recorded documents such as the lis pendens, the
corresponding summons and complaint, the original mortgage to which the lis pendens relates, any mortgage
assignments, and a variety of other recorded documents.
This research is based on primary data gathering and analysis of that data by our researchers. This data is not
a sample. Still, not all information was available for 100% of the records. For example, though interest rates
were available for 97% of all cases researched, there were a few cases in which interest rates were omitted
from the documents. Whenever this omission occurs in the report, it will be explained.
This is the most accurate account of mortgages actually entering the legal foreclosure process in Erie County
for years 2007 and 2008.
Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[1]
2007 Findings
Brief Overview of Lis Pendens in Erie County Municipalities
The research conducted by the Western New York Law Center provides as complete a picture as possible as
to how many unique loans descended into the foreclosure process in Erie County in the year 2007. Although
2,777 unique properties entered the foreclosure process, eliminating duplicate case numbers and parcel
information left a unique number of 2,710 lis pendens filings.1 Table 1 presents lis pendens filed in 2007 by
municipality.2
Table 1. 2007 Lis Pendens Filings by Municipality in Erie County
Municipality
Buffalo
Cheektowaga
Tonawanda (town)
Amherst
Hamburg
Lancaster
West Seneca
Evans
Tonawanda (city)
Lackawanna
Clarence
Grand Island Orchard Park Aurora Alden
North Collins
Concord
Collins
Elma
Newstead
Eden
Boston
Sardinia
Marilla
Colden
Brant Holland
Wales
# of Filings
% Share of All Filings
Occupied Housing Units
Population
1110
271
208
196
163
110
95
79
55
53
49
48
40.96%
10.00%
7.68%
7.23%
6.01%
4.06%
3.51%
2.92%
2.03%
1.96%
1.81%
1.77%
122,720
40,045
33,278
45,076
21,999
15,053
18,328
6,639
6,741
8,192
9,154
6,898
292,648
94,019
78,155
116,510
56,259
39,019
45,920
17,594
16,136
19,064
26,123
18,621
44
30
26
24
22
19
19
17
16
14
10
9
8
6
6
3
1.62%
1.11%
0.96%
0.89%
0.81%
0.70%
0.70%
0.63%
0.59%
0.52%
0.37%
0.33%
0.30%
0.22%
0.22%
0.11%
10,277
5,421
3,278
1,254
3,264
1,754
4,186
3,371
2,855
2,997
944
2,021
1,262
710
1,332
1,116
27,637
13,996
10,470
3,376
8,526
8,307
11,304
8,404
8,076
7,897
2,692
5,709
3,323
1,906
3,603
2,960
Duplicate case numbers may have resulted from a foreclosure on a mortgage that listed more than two properties.
Duplicate parcel information may have resulted from a property or its mortgages entering the foreclosure process more
than just the initial incident. For example, a lis pendens may have been re-filed to make a change to the initial filing. To
glean an accurate picture of mortgages entering the foreclosure process and to avoid distortion, duplicate information
was eliminated.
2 Though Erie County has more than 28 cities, towns, villages, and hamlets, for tax identification purposes, the Erie
County Department of Finance identifies these 28 municipalities as encompassing all other municipalities. For the
purpose of uniformity, the WNYLC uses these 28 municipalities as a baseline. 1
[2]
The city of Buffalo had 1,110 lis pendens filings in 2007 for a total share of over 40% of all Erie County
filings (40.96%). Buffalo’s inner-ring suburbs experienced the second-most significant number of filings:
Cheektowaga had 271 filings (10%); Town of Tonawanda had 208 filings (7.64%); Amherst had 196 filings
(7.23%); Hamburg had 163 filings (6.01%); and West Seneca had 95 filings (3.51%). Collectively, the firstring suburbs have a 34.4% share of all lis pendens filings for 2007. The Town of Lancaster also had a
significant number of filings: 110, or 4.06%. All Erie County municipalities had at least three mortgages on
properties from their jurisdictions enter the foreclosure process during 2007. Brief Overview of Lis Pendens in Erie County Zip Codes
As all municipalities saw lis pendens filings in 2007, so too did all sixty-two zip codes in Erie County. Table 2
provides a list of the top twenty zip codes ranked by the number of 2007 lis pendens filings. Table 2. Top 20 Zip Codes
by # of 2007 Lis Pendens Filings
The top one-third of zip codes
Rank
Zip Code # of Filings Occupied Housing Units
accounted for over two-thirds
1
14215
309
17,420
(71.1%) of all lis pendens filings.
2
14211
132
11,887
Zip code 14215 located principally
3
14220
109
10,478
4 (t)
14225
108
15,672
in the City of Buffalo—and
4 (t)
14150
108
18,857
stretching into a part of
6
14075
105
16,442
Cheektowaga—saw 309 lis
7
14207
95
9,832
pendens filings (an 11.4% share of
8
14213
91
10,076
all filings). The next closest zip
9
14086
86
10,659
code—14211—had a more
10 (t)
14223
82
9,971
10 (t)
14224
82
16,064
modest 132 lis pendens filings,
12
14206
79
10,270
43% of the filings in 14215 and a
13
14216
76
10,912
4.87% share of all filings. Zip
14 (t)
14221
71
20,627
code 14211 is also located
14 (t)
14226
71
12,555
principally on the east side of
16
14214
69
8,310
Buffalo and extends into an area
17
14217
68
10,779
of Cheektowaga. According to
18
14043
67
10,789
19
14210
65
6,764
the 2000 U.S. Census, zip codes
20
14218
53
8,626
14215 and 14211 have a
predominantly African-American population, 72.3% and 71.5%, respectively.3
Population
44,311
29,585
26,531
35,861
44,773
42,269
22,913
25,811
28,665
24,035
40,465
22,767
23,520
51,624
29,393
22,067
24,580
26,324
16,666
20,179
Originators of Mortgages Entering the Foreclosure Process
The foreclosure process—for all intents and purposes—starts when a lender decides to loan money to a
borrower. From there, a mortgage can be satisfied and the lien on the property discharged or the borrower
3
U. S. Census Bureau. (2000). American FactFinder fact sheet: Zip Codes 14211 and 14215. Retrieved February 26, 2009, from
http://factfinder.census.gov/servlet/QTTable?_bm=y&-context=qt&-qr_name=DEC_2000_SF1_U_QTP3&ds_name=DEC_2000_SF1_U&-CONTEXT=qt&-tree_id=4001&-all_geo_types=N&-geo_id=86000US14211&geo_id=86000US14215&-search_results=01000US&-format=&-_lang=en
[3]
can become delinquent on their mortgage payments, default on the loan, and enter foreclosure. 389 lenders
originated at least one loan that entered the foreclosure process in 2007. Table 3 shows the top forty loan
originators in Erie County and whether or not they were listed on HUD’s 2005 list of subprime lenders.4,5
The 2005 list was used because loans originated in 2005 were the highest amount entering the foreclosure
process in 2007. The top forty lenders originated 59% of all mortgages that entered the foreclosure process
in 2007. Table 3. Top 40 Loan Originators by # of 2007 Lis Pendens Filings
*On 2005 HUD Subprime List 4
HUD identifies a lender as subprime if the percentage of their portfolio that is subprime exceeds 50%. Data Sets. (2007, March 16). Retrieved February 26, 2009, from HUD User:
http://www.huduser.org/datasets/manu.html
5
[4]
Fourteen of the top forty lenders (35%) are considered subprime lenders. There is considerable subprime
penetration in the Erie County real estate market, as these fourteen subprime lenders originated 439
mortgages that went into foreclosure in 2007, or 16.2% of all mortgage entering the foreclosure process.6
The top originating lenders for lis pendens filings were HSBC Mortgage Corporation with 136 filings and
M&T Mortgage Corporation with 101 filings—5% and 3.7% of all loans, respectively—entering the
foreclosure process in 2007. 292 lenders originated five mortgages or less that went into foreclosure in 2007.
These 515 lis pendens account for 19% of all foreclosure initiations, with the average lender filing 1.76 lis
pendens.
Plaintiffs on Lis Pendens Filings
In a foreclosure case, the plaintiff is a lender who has initiated a foreclosure action through the filing of a lis
pendens. A plaintiff initiates a foreclosure after a borrower has defaulted on their mortgage. Due to the
complex securitization process—the selling and buying of bundled mortgage-backed securities—the lender
who originated the loan may not have necessarily been the lender who initiated a foreclosure action once the
borrowers defaulted on the loan. In 2007, there were 303 plaintiffs on lis pendens filings, as compared to 389
loan originators.7 Table 4 lists the top 25 plaintiffs on 2007 lis pendens filings in Erie County.
The top 25 plaintiffs account for 1, 971
out of 2,710 lis pendens, or 72.73%. The
top five plaintiffs—Wells Fargo Bank,
CitiMortgage Inc., HSBC Mortgage
Corporation, Deutsche Bank National
Trust Company, and Countrywide Home
Loans Inc.—filed 880 lis pendens
(32.47% of all filings). Yet, the top five
plaintiffs originated only 244 loans, 636
less than the lis pendens they filed as
plaintiffs. Deutsche Bank National Trust
Company filed 142 lis pendens, yet they
didn’t originate a single mortgage that
went into foreclosure in Erie County in
2007. 239 plaintiffs filed five or less lis
pendens in 2007.
Table 4. Top 25 Plaintiffs by # of 2007 Lis Pendens Filings
Rank
1
2
3
4
5
6
7
8
8
10
11
12 (t)
12 (t)
14
15
16
17
18 (t)
18 (t)
20 (t)
20 (t)
20 (t)
23
24
25
WELLS FARGO BANK NA
CITIMORTGAGE INC
HSBC MORTGAGE CORPORATION (USA)
DEUTSCHE BANK NATIONAL TRUST CO
COUNTRYWIDE HOME LOANS INC
M&T BANK
US BANK NA
BANK OF NEW YORK
CHASE HOME FINANCE LLC
JP MORGAN CHASE BANK NA
HSBC BANK USA NA
BANK OF AMERICA NA
GMAC MORTGAGE LLC
HOUSEHOLD FINANCE REALTY CORP OF NY
BENEFICIAL HOMEOWNER SERVICE CORP
KEY BANK NATIONAL ASSOCIATION
MIDFIRST BANK
ABN AMRO MORTGAGE GROUP INC
LASALLE BANK NA
CHARTER ONE BANK NA
PHH MORTGAGE CORP
WASHINGTON MUTUAL BANK NA
NATIONSTAR MORTGAGE LLC
STATE OF NEW YORK MORTGAGE AGENCY
OPTION ONE MORTGAGE CORPORATION
# of Filings
223
216
192
142
107
106
98
92
85
85
55
54
54
50
48
46
43
41
41
40
40
40
26
24
23
6 It should be noted that some of the loans originated by subprime lenders were prime loans, and some loans made by
prime lenders are subprime. A further analysis of the penetration of subprime loans in Erie County and a more accurate
picture of exactly how many subprime loans went into foreclosure will present itself later in this study.
7 Due to this shrinking of the number of involved parties, Table 4 only lists the top 25 plaintiffs, as compared to Table 3
which lists the top 40 loan originators. Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[5]
Lis Pendens Filings per Year of Origination
Recently originated loans—from 2002-2006—comprise the bulk of loans that entered the foreclosure process
in 2007. Figure 1 shows how many loans which were originated in a given year entered the foreclosure
process in 2007. From 1998-2005, there was a constant increase in the number of loans originated that had a
lis pendens filing in 2007. From there, 2006 and 2007 saw a decrease in the amount of 2007 lis pendens
filings.8 Only nineteen loans were originated in 2007. 2005 had the highest number of loans entering
foreclosure with 417, or 15.4% of all lis pendens filed in 2007. The five years preceding 2007 (2002-2006)
saw the origination of 1,569 loans that entered the foreclosure process in 2007 (57.9% of all filings). Figure 1. Number of 2007 Lis Pendens Filed in Erie County by Year of Mortgage Origination
Subprime Loans entering the Foreclosure Process in Erie County in 2007
In determining whether or not loans entering the foreclosure process could be considered subprime
or high-cost, the WNYLC used NYS Subprime Mortgage Law, Chapter 472 of the Laws of 2008 as a
guidepost. 9,10 The law makes the distinction between first-position liens and subordinate liens.
Figure 1 shows a significant decrease in loans originated in 2007 that entered the foreclosure process in 2007.
Common sense dictates that not many people would normally default on a loan so quickly. Most loans that were
originated in 2007 that are destined to fail will probably enter the foreclosure process in subsequent years.
9 “’Subprime home loan’ is defined as a home loan originated between January 1, 2003 and September 1, 2008 where the terms of
the loan are in excess of the threshold. Excluded from the definition are construction loans, temporary loans with a
term of twelve months or less, and home equity lines of credit. The threshold for a first lien mortgage loan is when the
annual percentage rate (APR) of the home loan when originated, exceeds 3 percentage points over the yield on treasury
securities which have similar periods of maturity to the loan maturity on the fifteenth day of the month that the loan was
created, or exceeds 5 percentage points for subordinate lien loans. If the APR will rise after an introductory period (such
8
[6]
However, due to the limits of our research capabilities, it is impossible to say with certainty which
position the loan was in when it was originated. Therefore, we only look at the thresholds for
subprime and high-cost status enumerated in the law. When we say “subprime” or “high-cost,” we
refer only to thresholds and NOT position of lien. Traditionally, it makes sense for the entity in first
position to foreclose on a mortgage because they will then have the first opportunity to recapture the
loan amount. In some circumstances, a lender in a second position may foreclose on the loan if the
amount of the subordinate loan greatly exceeds the remaining principal on the first mortgage and
there is substantial equity in the house to pay off the first lender with leftover equity for the second
lender. Also, it should be noted that 25 commercial mortgages were included in our analysis of
subprime mortgages in an effort to show all mortgages which exceeded subprime thresholds, even
though the law only addresses residential loans.
Brief Overview of Subprime and High-Cost Loans in Erie County
There were 724 subprime or high-cost loans originated in the years 2003-2007 that entered the foreclosure
process in 2007, or 53.6% of all loans (1,351) from that time period. Even though this is a fragment of all
loans with 2007 lis pendens, the subprime or high-cost loans still account for 26.72% of all filings (2,710)
regardless of year of mortgage origination. These loans exceeded the subprime APR thresholds:11
•
225 unique loans exceeded the subprime threshold for a T-Bill +3 loan (APR of the home loan when
originated exceeded three percentage points over the yield on treasury securities which have similar
periods of maturity). For example, a mortgage that originated in January 2003 and had an APR of
8.50% would be considered a subprime loan because it exceeded 8.13% (3% over the yield on
treasury securities). At the time, a conventional fixed rate prime mortgage would have been 5.92%.12
•
130 unique loans exceeded the subprime threshold for a T-Bill +5 loan (APR of the home loan when
originated exceeded five percentage points over the yield on treasury securities which have similar
periods of maturity). An example of a mortgage exceeding this threshold would be a loan originated
as in the typical case of subprime adjustable rate mortgages), the APR to be considered is the one that applies after the
introductory period ends.” (Harper, Elizabeth and Keefe, Kirsten (2008). State Legislature Addresses Mortgage Foreclosure
Crises and Subprime Lending Abuse. Legal Services Journal.)
10 “’High cost home loan’ is defined in Banking Law § 6-l as a loan incurred for personal, family or household purposes,
secured by a mortgage or deed of trust on real estate upon which there is located or there is to be located a one to four
family home or the borrower’s principal dwelling. The property must be located in NY and the principal balance cannot
exceed the lesser of the conforming loan size limit for a comparable dwelling as established by the federal national
mortgage association, or $300,000. The terms of the loan must exceed one or more thresholds to be considered “highcost”: (1) for first lien loans, the annual percentage rate (APR) exceeds 8 percentage points over the yield on treasury
securities having comparable periods of maturity to the loan, measured as the fifteenth day of the month immediately
preceding the month in which the application for the loan is made; for subordinate lien loans, the APR exceeds 9
percentage points.” (Harper, Elizabeth and Keefe, Kirsten (2008). State Legislature Addresses Mortgage Foreclosure Crises and
Subprime Lending Abuse. Legal Services Journal.)
11 It should be noted that analysis conducted by the WNYLC only looks at the thresholds to determine whether or not
loans are considered subprime or high-cost. There is a small possibility that some loans which exceed the threshold for
first-lien subprime may be second-lien loans and therefore wouldn’t be subprime as first-lien loans according to NYS
Banking Law § 6-l. Most lis pendens, however, are filed on first-position liens.
12 Historical Data. (2009, May 27). Retrieved May 28, 2009, from Federal Reserve Statistical Release:
http://www.federalreserve.gov/releases/h15/data/Monthly/H15_MORTG_NA.txt Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[7]
in January 2004 with an APR of 10.50%, which would be above the threshold of 9.97% (5% over the
yield on treasury securities), almost five percentage points over the average conventional fixed rate of
5.74%.
•
68 unique loans exceeded the high-cost threshold for a T-Bill +8 loan (APR of the home loan when
originated exceeded eight percentage points over the yield on treasury securities which have similar
periods of maturity). An example of a mortgage exceeding this threshold would be a loan originated
in January 2005 with an APR of 13.00%, which would be above the threshold of 12.78% (8% over
the yield on treasury securities) and much more than the average conventional fixed rate mortgage of
5.71% at the time.
•
301 unique loans exceeded the high-cost threshold for a T-Bill +9 loan (APR of the home loan when
originated exceeded nine percentage points over the yield on treasury securities which have similar
periods of maturity). An example of a mortgage exceeding this specific threshold would be a loan
originated in January 2006 with an APR of 14.00%, which would be above the threshold of 13.49%
(9% over the yield on treasury securities). This would be an extremely high rate as the average
conventional fixed rate mortgage was only 6.15% at the time.
Figure 2. High-Cost and Subprime Loans from 2003-2007 from 2007 Lis Pendens Subprime and High-Cost Loan Originators on 2007 Lis Pendens Filings
Of the 389 lenders who originated a mortgage that entered foreclosure in 2007, 131 lenders (33.7% of total)
originated at least one subprime or high-cost loan from 2003-2007. Table 5 lists the top twenty originators of
subprime loans that had a lis pendens filing in 2007. These top twenty lenders originated 61% of all subprime
and high-cost loans (441 out of 724). Wells Fargo Bank originated the most loans (18) that exceeded the
subprime threshold for a first lien mortgage loan (APR of the home loan when originated exceeded three
[8]
percentage points over the yield on treasury securities which have similar periods of maturity). BNC
Mortgage Inc. originated the most loans (13) that exceeded the subprime threshold for a subordinate Table 5. Top 20 Originators of Subprime and High-Cost Loans by # of 2007 Lis Pendens Filings
Rank
1
2 (t)
2 (t)
2 (t)
5
6
7
8
9
10
11
12 (t)
12 (t)
14
15 (t)
15 (t)
15 (t)
18
19
20
Originating Lender
FREMONT INVESTMENT & LOAN*
NEW CENTURY MORTGAGE CORP*
WELLS FARGO BANK NA*
OPTION ONE MORTGAGE CORP*
FIRST FRANKLIN ARGENT MORTGAGE COMPANY LLC*
BNC MORTGAGE INC
JPMORGAN CHASE BANK NA
EQUIFIRST CORPORATION*
ENCORE CREDIT CORP*
LONG BEACH MORTGAGE COMPANY*
CENTEX HOME EQUITY COMPANY LLC*
ACCREDITED HOME LENDERS INC*
NOVASTAR MORTGAGE INC*
WMC MORTGAGE CORP*
AMERIQUEST MORTGAGE COMPANY*
INDYMAC BANK FSB
WELLS FARGO FIN. CREDIT SERVICES NY*
M&T MORTGAGE CORPORATION
Subprime +3 Subprime +5 High Cost +8 High Cost +9 (% Share)
(% Share)
(% Share)
(% Share)
Total
8 (19.5)
9 (28.1)
18 (56.3)
7 (21.9)
7 (21.9)
17 (58.6)
2 (7.1)
6 (24)
4 (16.7)
6 (26.1)
3 (15)
5 (29.4)
1 (5.9)
7 (46.7)
2 (14.3)
3 (21.4)
3 (21.4)
2 (15.8)
1 (9.1)
4 (40)
0 (0.0)
1 (3.1)
3 (9.4)
7 (21.9)
8 (26.7)
3 (10.3)
13 (46.4)
12 (48)
2 (8.3)
0 (0.0)
6 (30)
2 (11.8)
3 (17.7)
0 (0.0)
2 (14.3)
0 (0.0)
1 (7.1)
4 (30.8)
2 (18.2)
1 (10)
5 (12.2)
2 (6.3)
1 (3.1)
5 (15.6)
2 (6.7)
5 (17.2)
5 (17.9)
0 (0.0)
8 (33.3)
1 (4.4)
1 (5.0)
1 (5.9)
3 (17.7)
1 (6.7)
1 (7.1)
1 (7.1)
0 (0.0)
3 (23.1)
3 (27.3)
1 (10)
28 (68.3)
20 (62.5)
10 (31.3)
13 (40.6)
13 ( 43.3)
4 (13.8)
8 (28.6)
7 (28)
10 (41.7)
16 (69.6)
10 (50.0)
9 (52.9)
10 (58.8)
7 (46.7)
9 (64.3)
10 (71.4)
10 (71.4)
4 (30.8)
5 (45.5)
4 (40)
* On 2005 HUD Subprime List 41
32
32
32
30
29
28
25
24
23
20
17
17
15
14
14
14
13
11
10
% of all loans by lender
77.3
86.5
74.4
50.8
78.9
80.5
96.5
49.0
85.7
95.8
44.4
68.0
65.4
53.6
87.5
70.0
42.4
81.2
73.3
9.9 lien mortgage loan (APR of the home loan when originated exceeded five percentage points over the yield on
treasury securities which have similar periods of maturity). Equifirst Corporation originated the most loans
(8) that exceeded the high-cost threshold for a first lien mortgage loan (APR of the home loan when
originated exceeded eight percentage points over the yield on treasury securities which have similar periods of
maturity). Fremont Investment & Loan originated the most loans (28) that exceeded the high-cost threshold
for a subordinate lien mortgage loan (APR of the home loan when originated exceeded nine percentage
points over the yield on treasury securities which have similar periods of maturity). Fremont Investment &
Loan also had the highest number of all subprime and high-cost loans (41). BNC Mortgage Inc. had the
highest percentage (96.5%) of all loans originated by a lender that entered the foreclosure process in 2007 that
were subprime or high-cost.
Plaintiffs on Lis Pendens Filings on Subprime and/or High-Cost Loans
Of the 303 plaintiffs who initiated a foreclosure on a mortgage, 116 initiated at least one foreclosure on a
subprime and/or high-cost loan. Table 6 shows the top ten plaintiffs on 2007 lis pendens filings on subprime
and high-cost loans in Erie County. These top ten plaintiffs initiated the foreclosure process on 60% of all
subprime and high-cost loans in 2007 (434 out of 724). The top plaintiff—even though they did not originate
a single loan that entered foreclosure in 2007—was Deutsche Bank National Trust Company with 109
foreclosure initiations on subprime and/or high-cost loans, or 76.8% of their lis pendens filings. Wells Fargo
Bank, the top originator of subprime and high-cost loans, was second with 89 lis pendens filings. Wells Fargo
Bank filed lis pendens on the most loans (36) that exceeded the subprime threshold for a first lien mortgage
loan (APR of the home loan when originated exceeded three percentage points over the yield on treasury
securities which have similar periods of maturity). Wells Fargo Bank also filed lis pendens on the most loans
[9]
(13) that exceeded the subprime threshold for a subordinate lien mortgage loan (APR of the home loan when
originated exceeded five percentage points over the yield on treasury securities which have similar periods of
maturity). US Bank filed lis pendens on the most loans (13) that exceeded the high-cost threshold for a first
lien mortgage loan (APR of the home loan when originated exceeded eight percentage points over the yield
on treasury securities which have similar periods of maturity). Table 6. Top 10 Plaintiffs on 2007 Lis Pendens Filings on Subprime and High-Cost Loans in Erie County
Rank
1
2
3
4
5
6
7
8
9
10
WELLS FARGO BANK NA
US BANK NA
BANK OF NEW YORK
LASALLE BANK NA
HSBC BANK USA NA
HSBC MORTGAGE SERVICES INC
OPTION ONE MORTGAGE CORP
Subprime +3 Subprime +5 High Cost +8 High Cost +9 (% Share)
(% Share)
(% Share)
(% Share)
Total
25 (22.9)
36 (40.5)
15 (21.4)
8 (14.8)
7 (24.1)
8 (30.8)
1 (5.9)
4 (25)
4 (33.3)
4 (33.3)
10 (9.2)
13 (14.6)
11 (15.7)
6 (11.1)
8 (27.6)
10 (38.5)
3 (17.7)
1 (6.3)
3 (25)
1 (8.3)
9 (8.3)
6 (6.7)
13 (18.6)
6 (11.1)
2 (6.9)
1 (3.9)
2 (11.8)
2 (12.5)
1 (8.3)
4 (33.3)
65 (59.6)
34 (38.2)
31 (44.3)
34 (63)
12 (41.4)
7 (26.9)
11 (64.7)
9 (56.3)
4 (33.3)
3 (25)
109
89
70
54
29
26
17
16
12
12
% of all loans by Plaintiff
76.8
39.9
71.4
58.7
70.7
30.6
65.4
8.3
85.7
52.8
Deutsche Bank National Trust Company filed lis pendens on the most loans (65) that exceeded the high-cost
threshold for a subordinate lien mortgage loan (APR of the home loan when originated exceeded nine
percentage points over the yield on treasury securities which have similar periods of maturity). HSBC
Mortgage Services Inc. filed the highest percentage (85.7%) of 2007 lis pendens that were subprime or highcost. Lis Pendens Filings on Subprime and/or High-Cost Loans by Municipality
Most municipalities in Erie County saw a significant amount of subprime and/or high-cost loans entering the
foreclosure process in 2007. Table 7 shows the total amount of subprime and/or high-cost lis pendens filings
by municipality, both as totals and as percentages of total lis pendens filings in 2007 in that municipality.
Buffalo had the highest amount of subprime and/or high-cost foreclosure initiations in 2007 with 282. The
second-closest municipality was Cheektowaga with 71 lis pendens. Buffalo had the most foreclosure
initiations in all four categories: 109 interest rates exceeded the subprime threshold for a first lien mortgage
loan (APR of the home loan when originated exceeded three percentage points over the yield on treasury
securities which have similar periods of maturity); 58 exceeded the subprime threshold for a subordinate lien
mortgage loan (APR of the home loan when originated exceeded five percentage points over the yield on
treasury securities which have similar periods of maturity); 19 exceeded the high-cost threshold for a first lien
mortgage loan (APR of the home loan when originated exceeded eight percentage points over the yield on
treasury securities which have similar periods of maturity); and 96 exceeded the high-cost threshold for a
subordinate lien mortgage loan (APR of the home loan when originated exceeded nine percentage points over
the yield on treasury securities which have similar periods of maturity). As a percentage of all lis pendens
filings for Buffalo in 2007, the subprime and/or high-cost filings represented 25.4%.
[10]
The municipality with the highest percentage was Marilla, with 5 out of 9 (55.6%) lis pendens filed on
subprime and/or high-cost loans. Wales, which had three lis pendens actions, was the only municipality that
did not encounter a subprime and/or high-cost loan which went into foreclosure in 2007.
Table 7. 2007 Lis Pendens Filings on Subprime and/or High-Cost Loans by Municipality
Municipality
Buffalo
Cheektowaga
Amherst
Hamburg
Tonawanda (town)
Lancaster
West Seneca
Evans
Orchard Park Clarence
Lackawanna
Concord
Tonawanda (city)
Elma
Grand Island Newstead
North Collins
Alden
Eden
Marilla
Boston
Collins
Aurora Colden
Holland
Brant Sardinia
Wales
Subprime +3 Subprime +5 High Cost +8 High Cost +9 % of all filings (% Share)
(% Share)
(% Share)
(% Share)
Total in Municipality
109 (38.7)
27 (38)
15 (21.7)
8 (16.7)
9 (20.5)
11 (35.5)
5 (19.2)
4 (21.1)
2 (12.5)
2 (14.3)
2 (15.4)
3 (30) 6 (60)
3 (33.3)
3 (33.3)
2 (25)
3 (42.9)
0 (0.0)
2 (33.3)
1 (20)
2 (50)
1 (25)
0 (0.0)
2 (50)
3 (100)
0 (0.0)
0 (0.0)
0 (0.0)
58 (20.6)
4 (5.6)
9 (13)
11 (22.9)
8 (18.2)
5 (16.1)
7 (30.4)
2 (10.5)
5 (31.3)
3 (21.4)
7 (53.9)
0 (0.0)
1 (10)
5 (55.6)
2 (22.2)
2 (25)
0 (0.0)
0 (0.0)
1 (16.7)
0 (0.0)
0 (0.0)
0 (0.0)
2 (50)
1 (25)
0 (0.0)
0 (0.0)
1 (50)
0 (0.0)
19 (6.7)
7 (9.9)
11 (15.9)
5 (10.4)
4 (9.1)
4 (12.9)
2 (7.7)
1 (5.3)
2 (12.5)
1 (7.1)
0 (0.0)
3 (30)
0 (0.0)
0 (0.0)
1 (11.1)
1 (12.5)
0 (0.0)
3 (42.9)
2 (33.3)
0 (0.0)
1 (25)
1 (25)
0 (0.0)
0 (0.0)
0 (0.0)
0 (0.0)
0 (0.0)
0 (0.0)
96 (34)
33 (46.5)
34 (49.3)
24 (50)
23 (52.3)
11 (35.5)
12 (46.2)
12 (63.2)
7 (43.8)
8 (57.1)
4 (30.8)
4 (40)
3 (30)
1 (11.1)
3 (33.3)
3 (37.5)
4 (57.1)
4 (57.1)
1 (16.7)
4 (80)
1 (25)
2 (50)
2 (50)
1 (25)
0 (0.0)
2 (100)
1 (50)
0 (0.0)
282
71
69
48
44
31
26
19
16
14
13
10
10
9
9
8
7
7
6
5
4
4
4
4
3
2
2
0
25.4
26.2
35.2
29.4
21.3
28.2
27.4
24.1
36.4
28.6
24.5
45.5
17.9
47.4
18.8
47.1
29.2
26.9
37.5
55.6
28.6
21.0
13.3
0.5
50.0
33.3
20.0
0.0
Adjustable Rate Mortgages entering the Foreclosure Process in Erie County in 2007
Brief Overview of Adjustable Rate Mortgages Entering the Foreclosure Process in Erie County in 2007
Adjustable rate mortgages (ARMs) are often linked to the subprime lending market, and we observed a
relationship between the two in this study. When a borrower takes out an ARM, they are given an initial
lower “teaser” rate. At some point in the future, usually after two or three years, the interest rate begins to
adjust periodically until it reaches a substantially higher maximum rate. In 2007, 540 unique adjustable rate
[11]
mortgages had a lis pendens filed against them. This represented 19.93% of all lis pendens filed in 2007 and
74.50% of subprime loans entering foreclosure in 2007.
Initial Rates on Adjustable Rate Mortgages Entering the Foreclosure Process in Erie County in 2007
The Western New York Law Center was able to obtain information on the initial rates of 522 ARMs with a
lis pendens filed in 2007.13 Figure 3 shows the initial rates for ARMs that entered the foreclosure process in
2007. 302 ARMs (57.9%) had an initial rate between 7.50% and 9.99%. Figure 3. Initial Rates on Adjustable Rate Mortgages (ARMs)
About twenty percent of ARMs (107) had a modest initial rate under 7.49%. Slightly more (113) had an
unfavorable initial rate of 10% or above. Many people in Erie County that took out ARMs didn’t even have
the luxury of a low initial teaser rate.
Maximum Rates on Adjustable Rate Mortgages Entering the Foreclosure Process in Erie County in 2007
The Western New York Law Center was able to obtain information on the maximum rates of 518 ARMs
with a lis pendens filed in 2007.14 Figure 4 shows the maximum rates for ARMs that entered the foreclosure
process in 2007. 282 ARMs had an untenable maximum rate of 15% or over, or 54.4% of all ARMs entering
the foreclosure process in 2007. Only 5 out of 518 (1.0%) had a maximum rate under 10%. Four ARMs
(0.8%) had maximum rates that exceeded 20%. 13
Some adjustable rate information was missing from the documents. Therefore, information about initial rates on
eighteen mortgages is unknown. The WNYLC obtained this information on 96.67% of foreclosure cases filed in 2007.
14
As with the initial rates, not all maximum rates were identified in mortgage or foreclosure documents recorded at the
Erie County Clerk’s Office. Information on maximum rates is missing on twenty-two mortgages. The WNYLC’s data
represents 95.9% of all cases.
[12]
Figure 4. Maximum Rates on Adjustable Rate Mortgages (ARMs)
2/28 Adjustable Rate Mortgages Entering the Foreclosure Process in Erie County in 2007
A very common type of ARM is called a 2/28 ARM, which simply means that a 30-year mortgage will have
an initial fixed-rate period of two years and for the remaining 28 years of the loan, the interest rate will
increase by a determined percent at a determined interval until the interest reaches its maximum rate.
Typically, an interest rate will adjust the most at the first change date and thereafter—every six or twelve
months—at a smaller percentage until it reaches the maximum interest rate.
Figure 5 illustrates the number of lis pendens filings in 2007 on 2/28 ARMs by year of origination from 19992007. It appears that 2/28 ARMs originated most recently encompass the majority of 2/28 ARMs that
entered the foreclosure process in 2007. From 2003-2004, there was a nearly 200% increase (from 25 to 74)
in the number of 2/28 ARMs originated that had a lis pendens filing in 2007. 2005 had the highest number
of 2/28 ARMs entering foreclosure with 100, or 28.9% of all 2/28 ARMs with lis pendens filings in 2007.
The three years preceding 2007 (2004-2006) saw the origination of 255 2/28 ARMs (73.7%) that entered the
foreclosure process in 2007.
[13]
Figure 5. 2007 Lis Pendens Filings on 2/28 ARMs by Year of Origination
Change Intervals on Adjustable Rate Mortgages Entering the Foreclosure Process in 2007
After an initial fixed rate period, an adjustable interest rate will adjust by a period specified in the originating
documents. Figure 6 exhibits the interest rate change intervals on ARMs entering the foreclosure process in
2007.15 86.1% of the ARMs reset every six months until the maximum interest rate is reached. Under this
time schedule, most ARMs will reach the maximum interest rate within the first five years of the loan term. Figure 6. Interest Rate Change Intervals on Adjustable Rate Mortgages
15
The Western New York Law Center obtained interest rate change interval data on 526 ARMs, or 97.4% of all cases. Information is missing on 14 mortgages. Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[14]
Originating Lenders of Adjustable Rate Mortgages Entering the Foreclosure Process in 2007
Of the 389 lenders who originated a mortgage that entered foreclosure in 2007, 117 lenders (30.1% of total)
originated at least one adjustable rate mortgage. Table 8 lists the top fifteen originators of adjustable rate
mortgages that had a lis pendens filing in 2007. Table 8. Top 15 Originators of ARMs that Entered the Foreclosure Process in 2007
Rank
1
2
3
4 (t)
4 (t)
6
7
8 (t)
8 (t)
10
11
12 (t)
12 (t)
14
15 (t)
15 (t)
15 (t)
15 (t)
Originating Lender
FREMONT INVESTMENT & LOAN
NEW CENTURY MORTGAGE CORP
AMERIQUEST MORTGAGE COMPANY
WELLS FARGO BANK NA
FIRST FRANKLIN
EQUIFIRST CORPORATION
CENTEX HOME EQUITY COMPANY LLC
ENCORE CREDIT CORP
WMC MORTGAGE CORP
LONG BEACH MORTGAGE COMPANY
ARGENT MORTGAGE COMPANY LLC
ACCREDITED HOME LENDERS INC
AMERICAS WHOLESALE LENDER
NOVASTAR MORTGAGE INC
# of ARMs
43
39
24
22
22
21
20
17
17
15
14
13
13
11
10
10
10
10
% of all filings % of all by lender
ARM filings 81.13
61.9
64.86
66.67
51.16
55.26
71.43
65.38
70.83
14.85
70
28.89
52
30.56
35.71
29.41
19.61
62.5
8.0
7.2
4.4
4.1
4.1
3.9
3.7
3.2
3.2
2.8
2.6
2.4
2.4
2.0
1.9
1.9
1.9
1.9
These top fifteen lenders originated 61.3% of all adjustable rate mortgages (331 out of 540). Fremont
Investment & Loan originated the most adjustable rate mortgages with 43, followed closely by Option One
Mortgage Corporation with 39. Of the top fifteen ARM-originating lenders, Fremont Investment & Loan
also had the highest percentage of ARMs (81.13%, or 43 out of 53) with a lis pendens filing in 2007. M&T
Mortgage Corporation had the smallest percentage of loans that were ARMs with lis pendens filing in 2007
(14.85%, or 15 out of 101).
Plaintiffs on Adjustable Rate Mortgages Entering the Foreclosure Process in 2007
Of the 303 plaintiffs who initiated a foreclosure on a mortgage, 87 initiated at least one foreclosure on an
adjustable rate mortgage. Table 9 shows the top ten plaintiffs on 2007 lis pendens filings on adjustable rate
mortgages in Erie County. These top ten plaintiffs initiated the foreclosure process on 64.26% of all ARMs
in 2007 (347 out of 540). Deutsche Bank National Trust Company was the top plaintiff with 88 lis pendens
filings on ARMs in 2007, or 61.97% of all lis pendens that the company filed in 2007. Fremont Investment &
Loan had the highest percentage of lis pendens filings on ARMs in 2007 with 100% (10 out of 10) of their
[15]
filings initiating a foreclosure on an ARM. Out of the top ten plaintiffs, HSBC Bank had the lower
percentage of lis pendens filings on ARMs in 2007 with 6.77% (13 out of 192).
Table 9. Top 10 Plaintiffs on 2007 Lis Pendens Filings on Adjustable Rate Mortgages
Rank
1
2
3
4
5
6 (t)
6 (t)
8 (t)
8 (t)
10
WELLS FARGO BANK NA
US BANK NA
BANK OF NEW YORK
LASALLE BANK NA
HSBC BANK USA NA
FREMONT INVESTMENT&LOAN
# of ARMs
88
80
46
45
18
17
17
13
13
10
% of all filings by plaintiff
61.97
35.87
46.94
48.91
21.18
41.46
65.38
6.77
56.52
100 Adjustable Rate Mortgages Entering the Foreclosure Process in 2007 by Municipality
Table 10. 2007 Lis Pendens Filing on ARMs by Municipality
Of the 28 municipalities in Erie County, 26 out of 28
(93%) had at least one lis pendens filed on an ARM
in 2007. Only Holland and Wales saw no ARMs
enter the foreclosure process in 2007. Buffalo had
the highest amount of ARMs with a lis pendens filing
in 2007 with 168 (15.14% of all filings, or roughly 1
in 7). Amherst had the highest percentage of ARMs
with lis pendens filings in 2007 with over 1 in 3
(34.69%) foreclosure initiations being on an ARM.
Orchard Park, Marilla, Brant, Concord, Elma, Alden,
and Clarence also have roughly 1 in 3 lis pendens
filings on ARMs in 2007. Boston, West Seneca,
Hamburg, and Eden have approximately 1 in 4 lis
pendens filings on ARMs in 2007. Lancaster,
Newstead, Evans, and Cheektowaga have roughly 1
in 5 lis pendens filings on ARMs in 2007. Grand
Island, Aurora, North Collins, the Town of
Tonawanda, Collins, and Buffalo have approximately
1 in 6 lis pendens filings on ARMs in 2007. We
found there is a significant penetration of ARMs into
nearly all municipalities in Erie County.
Municipality
# of ARMs
% of filings in Municipality
Buffalo
Amherst
Cheektowaga
Hamburg
Tonawanda (town)
West Seneca
Lancaster
Evans
Orchard Park Clarence
Alden
Grand Island Concord
Elma
Lackawanna
Aurora Tonawanda (city)
Boston
Eden
Newstead
North Collins
Marilla
Collins
Brant Colden
Sardinia
Holland
Wales
168
68
53
41
37
26
26
18
15
15
8
8
7
6
6
5
5
4
4
4
4
3
3
2
1
1
0
0
15.1
34.7
19.6
25.2
17.8
27.4
23.6
22.8
34.1
30.6
30.8
16.7
31.8
31.6
11.3
16.7
9.1
28.6
25.0
23.5
16.7
33.3
15.8
33.3
12.5
10.0
0.0
0.0
[16]
Adjustment of Adjustable Rate Mortgages
The first adjustment of an ARM is often enough to make a mortgage payment unaffordable enough to send a
borrower into default and possibly foreclosure. Even if the first adjustment does not force default, it may
leave the borrower in a more vulnerable position trying to make a higher mortgage payment—often with the
same budget and resources as when they were making the lower payment amount. The second, third, and
fourth adjustments may make the situation even more tenuous. Figure 7 shows the percentage of ARMs
adjusting before the filing of a lis pendens versus the percentage of ARMs which would have adjusted after
the date the lis pendens was filed. 59.62% of all ARMs (313 out of 525) adjusted at least once before the
initiation of the foreclosure process.16 However, 212 (40.38%) had not adjusted before the filing of a lis
pendens. 2006 saw the greatest amount of adjustments with 88. 2007 saw the second greatest amount of
adjustments with 60 ARMs adjusting before a lis pendens filing. Figure 7. Percentages of ARMs Adjusting Before and After a Lis Pendens Filing in 2007
Fixed Rate Mortgages Entering the Foreclosure Process in 2007
Interest Rates on Fixed Rate Mortgages Entering the Foreclosure Process in 2007
In 2007, 2098 fixed interest rate mortgages had a lis pendens filing in 2007 (77.4% of all filings). Figure 8
illustrates the interest rates of those 2098 mortgages as percentages within a range of rates. The highest
amount of mortgages (843) had an interest rate between 7.5% and 9.99% (40.2%). 401 (19.1% ) fixed rate
mortgages with a lis pendens filing in 2007 had an interest above 10%. These subprime and high-cost loans,
though not adjustable rate, stayed extremely high from the origination of the loan to default to initiation of
foreclosure. 16
Information on the adjustment dates of ARMs is missing on 15 mortgages.
[17]
Figure 8. Interest Rates of Fixed Rate Mortgages with 2007 Lis Pendens Filing
Fate of Mortgages Entering the Foreclosure Process in 2007
Brief Overview of the Fate of Mortgages Entering the Foreclosure Process in 2007
In 2007, 2,710 unique lis pendens were filed on mortgages which entered the foreclosure process in 2007. In
reviewing legal documents recorded at the Erie County Clerk’s Office, we were able to see what resolution, if
any, was reached on each individual case. There were five distinct fates for a mortgage in the foreclosure
process:
•
cancellation of lis pendens (legal actions which seek to cancel a lis pendens and end a foreclosure
action—stipulation of discontinuance, affidavit to cancel, order to cancel, and satisfaction of
mortgage)
•
deed transfer as a result of foreclosure (a judgment of foreclosure is issued and the plaintiff
auctions off the property or takes title if no auction bids are sufficient)
•
deed transfer to stop a foreclosure (either a short sale [plaintiff agrees to accept the proceeds of
the sale of property in exchange for loan forgiveness] or a deed in lieu of foreclosure [plaintiff takes
title of property to recoup mortgage payments])
•
a judgment of foreclosure with no resolution (plaintiff obtains a judgment and—for whatever
reason—doesn’t transfer ownership from the borrower to themselves or a third party)
[18]
•
no judgment of foreclosure and no resolution (lender has initiated a foreclosure process, yet there
is no further action).17
Figure 9 provides a look at lis pendens filings in the foreclosure process. 738 lis pendens (27.2% of all filings)
have been cancelled. 973 lis pendens fillings (35.9%) reached a judgment of foreclosure and ownership was
transferred. 165 lis pendens filings (6.1%) were sold to avoid a judgment of foreclosure. 834 lis pendens
filings (30.8%) never reached a resolution.
Figure 9. Fate of Mortgages with Lis Pendens Filings in 2007 (as of 5/09)
17
It is possible that the plaintiff in the foreclosure is still actively pursuing a judgment and/or intending to auction the
property. This is true in some cases as judgments have been filed as recently as January of 2009, yet the majority of
inactive cases have not had any recent activity in months. Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[19]
Fate of Mortgages Entering the Foreclosure Process in 2007 by Municipality
Table 11 shows the fates of lis pendens as percentages in each category by municipality. Table 11. Fates of 2007 Lis Pendens Filing as Percentages in Each Category by Municipality
Deeds as Result of Foreclosure
Deeds to Stop Foreclosure
Cancelling of Lis Pendens
Judgment Only
No Resolution
Municipality
Alden
Amherst
Aurora Boston
Brant Buffalo
Cheektowaga
Clarence
Colden
Collins
Concord
# 7
52
7
5
4
443
104
11
1
8
6
% of Total
0.72%
5.34%
0.72%
0.51%
0.41%
45.53%
10.69%
1.13%
0.10%
0.82%
0.62%
# 3
23
3
1
0
31
20
5
1
1
2
% of Total
1.82%
13.94%
1.82%
0.61%
0.00%
18.79%
12.12%
3.03%
0.61%
0.61%
1.21%
# 4
57
11
2
2
272
73
23
2
6
6
% of Total
0.54%
7.72%
1.49%
0.27%
0.27%
36.86%
9.89%
3.12%
0.27%
0.81%
0.81%
# 5
29
7
0
0
176
36
5
2
2
4
% of Total
1.26%
7.32%
1.77%
0.00%
0.00%
44.44%
9.09%
1.26%
0.51%
0.51%
1.01%
# 7
35
2
6
0
188
38
5
2
2
4
% of Total
1.60%
7.99%
0.46%
1.37%
0.00%
42.92%
8.68%
1.14%
0.46%
0.46%
0.91%
Eden
Elma
Evans
Grand Island Hamburg
Holland
Lackawanna
Lancaster
Marilla
Newstead
North Collins
Orchard Park Sardinia
Tonawanda (city)
Tonawanda (town)
Wales
West Seneca
5
4
27
8
63
3
19
36
3
6
12
9
2
21
70
2
35
0.51%
0.41%
2.78%
0.82%
6.48%
0.31%
1.95%
3.70%
0.31%
0.62%
1.23%
0.92%
0.21%
2.16%
7.19%
0.21%
3.60%
1
2
11
11
12
1
4
5
0
2
0
4
1
1
15
0
5
0.61%
1.21%
6.67%
6.67%
7.27%
0.61%
2.42%
3.03%
0.00%
1.21%
0.00%
2.42%
0.61%
0.61%
9.09%
0.00%
3.03%
4
4
18
18
46
0
13
33
2
1
5
19
2
14
69
0
32
0.54%
0.54%
2.44%
2.44%
6.23%
0.00%
1.76%
4.47%
0.27%
0.14%
0.68%
2.58%
0.27%
1.90%
9.35%
0.00%
4.34%
2
6
13
3
22
2
10
16
4
5
3
3
1
8
22
1
9
0.51%
1.51%
3.28%
0.76%
5.56%
0.51%
2.52%
4.04%
1.01%
1.26%
0.76%
0.76%
0.25%
2.02%
5.56%
0.25%
2.27%
4
3
10
8
20
0
7
20
0
3
4
9
4
11
32
0
14
0.91%
0.68%
2.28%
1.83%
4.57%
0.00%
1.60%
4.57%
0.00%
0.68%
0.91%
2.05%
0.91%
2.51%
7.31%
0.00%
3.20%
Buffalo had the highest percentage in all categories: 45.53% (443) of all deeds as a result of foreclosure;
18.79% (31) of all deeds to stop a foreclosure; 36.86% (272) of lis pendens cancellations; 44.44% (176) of a
judgment of foreclosure only; and 42.92% (188) of no judgment and no resolution. Other municipalities
which ranked high as a percentage in all categories were: Cheektowaga, the Town of Tonawanda, Amherst,
and Hamburg.
Table 12 shows the fates of lis pendens as percentages of all filings in each municipality. Brant and Wales tied
for the highest percentage (66.67%) of lis pendens filings which resulted in a deed transfer as a result of
foreclosure. Buffalo had the highest percentage (39.91%) out of the larger municipalities. Grand Island had
the highest percentage (22.92%) of lis pendens filings which ended in a deed transfer to stop foreclosure.
Clarence had almost half of its lis pendens filings (46.94%) end with a cancellation. Sixteen municipalities had
at least 1 in 4 lis pendens filings cancelled. Colden and Sardinia had the highest percentage of lis pendens
filings reach either a judgment with no resolution or no resolution at all (50%). Buffalo saw nearly one in
three (32.8%) 2007 lis pendens filings reach no resolution. Every municipality (except Brant) saw at least
one-fifth of 2007 lis pendens filings reach no resolution. Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[20]
Table 12. Fates of 2007 Lis Pendens Filing as Percentages of Filings in Municipality
Deeds as Result of Foreclosure
Municipality
Alden
Amherst
Aurora Boston
Brant Buffalo
Cheektowaga
Clarence
Colden
Collins
Concord
Eden
Elma
Evans
Grand Island Hamburg
Holland
Lackawanna
Lancaster
Marilla
Newstead
North Collins
Orchard Park Sardinia
Tonawanda (city)
Tonawanda (town)
Wales
West Seneca
Deeds to Stop Foreclosure
Cancelling of Lis Pendens
Judgment Only
No Resolution
# 7
52
7
5
4
443
104
11
1
8
6
% of Total
26.92%
26.53%
23.33%
35.71%
66.67%
39.91%
38.38%
22.45%
12.50%
42.11%
27.27%
# 3
23
3
1
0
31
20
5
1
1
2
% of Total
11.54%
11.73%
10.00%
7.14%
0.00%
2.79%
7.38%
10.20%
12.50%
5.26%
9.09%
# 4
57
11
2
2
272
73
23
2
6
6
% of Total
15.38%
29.08%
36.67%
14.29%
33.33%
24.50%
26.94%
46.94%
25.00%
31.58%
27.27%
# 5
29
7
0
0
176
36
5
2
2
4
% of Total
19.23%
14.80%
23.33%
0.00%
0.00%
15.86%
13.28%
10.20%
25.00%
10.53%
18.18%
# 7
35
2
6
0
188
38
5
2
2
4
% of Total
26.92%
17.86%
6.67%
42.86%
0.00%
16.94%
14.02%
10.20%
25.00%
10.53%
18.18%
5
4
27
8
63
3
19
36
3
6
12
9
2
21
70
2
35
31.25%
21.05%
34.18%
16.67%
38.65%
50.00%
35.85%
32.73%
33.33%
35.29%
50.00%
20.45%
20.00%
38.18%
33.65%
66.67%
36.84%
1
2
11
11
12
1
4
5
0
2
0
4
1
1
15
0
5
6.25%
10.53%
13.92%
22.92%
7.36%
16.67%
7.55%
4.55%
0.00%
11.76%
0.00%
9.09%
10.00%
1.82%
7.21%
0.00%
5.26%
4
4
18
18
46
0
13
33
2
1
5
19
2
14
69
0
32
25.00%
21.05%
22.78%
37.50%
28.22%
0.00%
24.53%
30.00%
22.22%
5.88%
20.83%
43.18%
20.00%
25.45%
33.17%
0.00%
33.68%
2
6
13
3
22
2
10
16
4
5
3
3
1
8
22
1
9
12.50%
31.58%
16.46%
6.25%
13.50%
33.33%
18.87%
14.54%
44.44%
29.41%
12.50%
6.82%
10.00%
14.55%
10.58%
33.33%
9.47%
4
3
10
8
20
0
7
20
0
3
4
9
4
11
32
0
14
25.00%
15.79%
12.66%
16.67%
12.27%
0.00%
13.21%
18.18%
0.00%
17.65%
16.67%
20.45%
40.00%
20.00%
15.39%
0.00%
14.74%
Fates of Mortgages Entering the Foreclosure Process in 2007 by Zip Code
Table 13 shows the fates of lis pendens as percentages in each category by zip code. Zip code 14215 had the
highest percentage in four categories: 12.13% (118) of all deeds as a result of foreclosure; 9.75% (72) of lis
pendens cancellations; 14.65% (58) of a judgment of foreclosure only; and 12.56% (55) of no judgment and
no resolution. Zip code 14072 had the highest percentage 6.67% (11) of all deeds to stop a foreclosure.
[21]
Table 13. Fates of 2007 Lis Pendens Filing as Percentages in Each Category by Zip Code
Judgment Only
No Resolution
Zip
14001
14004
14006
14025
14026
14030
14031
14032
14033
14034
14043
Deeds as Result of Foreclosure Deeds to Stop Foreclosure Cancelling of Lis Pendens
# 6
8
21
5
0
2
6
3
0
6
22
% of Total
0.62%
0.82%
2.16%
0.51%
0.00%
0.20%
0.62%
0.31%
0.00%
0.62%
2.26%
# 2
3
6
0
0
1
2
2
0
0
6
% of Total
1.21%
1.82%
3.64%
0.00%
0.00%
0.61%
1.21%
1.21%
0.00%
0.00%
3.64%
# 1
4
7
1
2
2
11
4
1
5
26
% of Total
0.14%
0.54%
0.95%
0.14%
0.27%
0.27%
1.49%
0.54%
0.14%
0.68%
3.52%
# 4
6
11
0
0
1
1
0
0
0
5
% of Total
1.01%
1.52%
2.78%
0.00%
0.00%
0.25%
0.25%
0.00%
0.00%
0.00%
1.26%
# 3
7
6
6
0
2
1
2
2
2
8
% of Total
0.68%
1.60%
1.37%
1.37%
0.00%
0.46%
0.23%
0.46%
0.46%
0.46%
1.83%
14047
14051
14052
14055
14057
14059
14068
14069
14070
14072
14075
14080
14081
14085
14086
14091
14102
14111
14127
14139
14141
14150
14169
14170
14201
14202
14203
14204
14206
14207
14208
14209
14210
14211
14212
14213
14214
14215
14216
14217
14218
14219
14220
14221
14222
14223
14224
14225
14226
14227
14228
7
8
9
1
6
3
2
1
2
8
42
2
3
6
29
1
0
10
9
4
4
42
0
1
4
1
2
5
36
42
10
7
37
60
25
40
28
118
25
22
18
15
45
16
5
24
33
37
22
12
5
0.72%
0.82%
0.92%
0.10%
0.62%
0.31%
0.20%
0.10%
0.20%
0.82%
4.32%
0.20%
0.31%
0.62%
2.98%
0.10%
0.00%
1.03%
0.92%
0.41%
0.41%
4.32%
0.00%
0.10%
0.41%
0.10%
0.20%
0.51%
3.70%
4.32%
1.03%
0.72%
3.80%
6.17%
2.57%
4.11%
2.88%
12.13%
2.57%
2.26%
1.85%
1.54%
4.62%
1.64%
0.51%
2.47%
3.39%
3.80%
2.26%
1.23%
0.51%
5
2
3
0
1
2
0
0
1
11
7
2
0
1
4
0
0
0
4
0
2
8
0
0
2
0
0
0
3
1
1
1
0
2
1
4
0
6
6
5
5
4
2
9
5
3
5
8
7
4
6
3.03%
1.21%
1.82%
0.00%
0.61%
1.21%
0.00%
0.00%
0.61%
6.67%
4.24%
1.21%
0.00%
0.61%
2.42%
0.00%
0.00%
0.00%
2.42%
0.00%
1.21%
4.85%
0.00%
0.00%
1.21%
0.00%
0.00%
0.00%
1.82%
0.61%
0.61%
0.61%
0.00%
1.21%
0.61%
2.42%
0.00%
3.64%
3.64%
3.03%
3.03%
2.42%
1.21%
5.45%
3.03%
1.82%
3.03%
4.85%
4.24%
2.42%
3.64%
11
9
12
2
4
4
6
0
1
18
33
1
2
2
23
1
1
4
19
0
4
23
0
3
9
2
1
5
16
23
15
9
10
25
8
22
20
72
24
30
13
10
25
26
5
30
28
27
16
12
8
1.49%
1.22%
1.62%
0.27%
0.54%
0.54%
0.81%
0.00%
0.14%
2.44%
4.47%
0.14%
0.27%
0.27%
3.12%
0.14%
0.14%
0.54%
2.57%
0.00%
0.54%
3.12%
0.00%
0.41%
1.22%
0.27%
0.14%
0.68%
2.17%
3.12%
2.03%
1.22%
1.35%
3.39%
1.08%
2.98%
2.71%
9.75%
3.25%
4.07%
1.76%
1.35%
3.39%
3.52%
0.68%
4.06%
3.79%
3.66%
2.17%
1.63%
1.08%
2
7
10
0
2
5
1
2
1
3
15
3
0
1
14
1
0
3
4
0
3
14
1
1
1
0
1
4
16
13
10
1
8
13
10
12
12
58
10
5
10
5
20
7
1
10
6
17
11
7
7
0.51%
1.77%
2.53%
0.00%
0.51%
1.26%
0.25%
0.51%
0.25%
0.76%
3.79%
0.76%
0.00%
0.25%
3.54%
0.25%
0.00%
0.76%
1.01%
0.00%
0.76%
3.54%
0.25%
0.25%
0.25%
0.00%
0.25%
1.01%
4.04%
3.28%
2.52%
0.25%
2.02%
3.28%
2.52%
3.03%
3.03%
14.65%
2.52%
1.26%
2.53%
1.26%
5.05%
1.77%
0.25%
2.52%
1.52%
4.29%
2.78%
1.77%
1.77%
4
3
2
1
5
3
2
0
0
8
8
1
0
5
16
0
0
3
10
0
4
21
0
0
1
0
0
5
8
16
16
3
10
32
7
13
9
55
11
6
7
7
17
13
1
15
10
19
15
3
4
0.91%
0.68%
0.46%
0.23%
1.14%
0.68%
0.46%
0.00%
0.00%
1.83%
1.83%
0.23%
0.00%
1.14%
3.65%
0.00%
0.00%
0.68%
2.28%
0.00%
0.91%
4.79%
0.00%
0.00%
0.23%
0.00%
0.00%
1.14%
1.83%
3.65%
3.65%
0.68%
2.28%
7.31%
1.60%
2.97%
2.05%
12.56%
2.51%
1.37%
1.60%
1.60%
3.88%
2.97%
0.23%
3.42%
2.28%
4.34%
3.43%
0.68%
0.91%
[22]
Table 14 shows the fates of lis pendens as percentages of all filings in each zip code. Table 14. Fates of 2007 Lis Pendens Filing as Percentages of Filings in Zip Codes
Judgment Only
No Resolution
Zip
14001
14004
14006
14025
14026
14030
14031
14032
14033
14034
14043
Deeds as Result of Foreclosure Deeds to Stop Foreclosure Cancelling of Lis Pendens
# 6
8
21
5
0
2
6
3
0
6
22
% of Total
37.50%
28.57%
41.18%
41.67%
0.00%
25.00%
28.57%
27.27%
0.00%
46.15%
32.84%
# 2
3
6
0
0
1
2
2
0
0
6
% of Total
12.50%
10.71%
11.76%
0.00%
0.00%
12.50%
9.52%
18.18%
0.00%
0.00%
8.96%
# 1
4
7
1
2
2
11
4
1
5
26
% of Total
6.25%
14.29%
13.72%
8.33%
100.00%
25.00%
52.38%
36.36%
33.33%
38.46%
38.80%
# 4
6
11
0
0
1
1
0
0
0
5
% of Total
25.00%
21.43%
21.57%
0.00%
0.00%
12.50%
4.76%
0.00%
0.00%
0.00%
7.46%
# 3
7
6
6
0
2
1
2
2
2
8
% of Total
18.75%
25.00%
11.76%
50.00%
0.00%
25.00%
4.76%
18.18%
66.67%
15.38%
11.94%
14047
14051
14052
14055
14057
14059
14068
14069
14070
14072
14075
14080
14081
14085
14086
14091
14102
14111
14127
14139
14141
14150
14169
14170
14201
14202
14203
14204
14206
14207
14208
14209
14210
14211
14212
14213
14214
14215
14216
14217
14218
14219
14220
14221
14222
14223
14224
14225
14226
14227
14228
7
8
9
1
6
3
2
1
2
8
42
2
3
6
29
1
0
10
9
4
4
42
0
1
4
1
2
5
36
42
10
7
37
60
25
40
28
118
25
22
18
15
45
16
5
24
33
37
22
12
5
24.14%
27.59%
26.47%
25.00%
33.33%
17.65%
18.18%
33.33%
40.00%
16.67%
40.00%
22.22%
60.00%
40.00%
33.72%
33.33%
0.00%
50.00%
19.57%
100.00%
23.53%
38.89%
0.00%
20.00%
23.53%
33.33%
50.00%
26.32%
45.57%
44.21%
19.23%
33.33%
56.92%
45.45%
49.02%
43.96%
40.58%
38.19%
32.89%
32.35%
33.96%
36.59%
41.28%
22.53%
29.41%
29.27%
40.24%
34.26%
30.98%
31.58%
16.67%
5
2
3
0
1
2
0
0
1
11
7
2
0
1
4
0
0
0
4
0
2
8
0
0
2
0
0
0
3
1
1
1
0
2
1
4
0
6
6
5
5
4
2
9
5
3
5
8
7
4
6
17.24%
6.90%
8.82%
0.00%
5.56%
11.76%
0.00%
0.00%
20.00%
22.91%
6.67%
22.22%
0.00%
6.67%
4.65%
0.00%
0.00%
0.00%
8.70%
0.00%
11.76%
7.41%
0.00%
0.00%
11.76%
0.00%
0.00%
0.00%
3.80%
1.05%
1.92%
4.76%
0.00%
1.52%
1.96%
4.40%
0.00%
1.94%
7.89%
7.35%
9.43%
9.76%
1.83%
12.68%
29.41%
3.66%
6.10%
7.41%
9.86%
10.53%
20.00%
11
9
12
2
4
4
6
0
1
18
33
1
2
2
23
1
1
4
19
0
4
23
0
3
9
2
1
5
16
23
15
9
10
25
8
22
20
72
24
30
13
10
25
26
5
30
28
27
16
12
8
37.93%
31.03%
35.29%
50.00%
22.22%
23.53%
54.55%
0.00%
20.00%
37.50%
31.43%
11.11%
40.00%
13.33%
26.74%
33.33%
100.00%
20.00%
41.30%
0.00%
23.53%
21.30%
0.00%
60.00%
52.94%
66.67%
25.00%
26.32%
20.25%
24.21%
28.85%
42.86%
15.38%
18.94%
15.69%
24.17%
28.99%
23.30%
31.58%
44.12%
24.53%
24.39%
22.94%
36.62%
29.41%
36.58%
34.14%
25.00%
22.54%
31.58%
26.67%
2
7
10
0
2
5
1
2
1
3
15
3
0
1
14
1
0
3
4
0
3
14
1
1
1
0
1
4
16
13
10
1
8
13
10
12
12
58
10
5
10
5
20
7
1
10
6
17
11
7
7
6.90%
24.14%
29.41%
0.00%
11.11%
29.41%
9.09%
66.67%
20.00%
6.25%
14.28%
33.33%
0.00%
6.67%
16.28%
33.33%
0.00%
15.00%
8.70%
0.00%
17.65%
12.96%
100.00%
20.00%
5.88%
0.00%
25.00%
21.05%
20.25%
13.68%
19.23%
4.76%
12.31%
9.85%
19.61%
13.19%
17.39%
18.77%
13.16%
7.35%
18.87%
12.19%
18.35%
9.86%
5.88%
12.20%
7.32%
15.74%
15.49%
18.42%
23.33%
4
3
2
1
5
3
2
0
0
8
8
1
0
5
16
0
0
3
10
0
4
21
0
0
1
0
0
5
8
16
16
3
10
32
7
13
9
55
11
6
7
7
17
13
1
15
10
19
15
3
4
13.79%
10.34%
5.88%
25.00%
27.78%
17.65%
18.18%
0.00%
0.00%
16.67%
7.62%
11.11%
0.00%
33.33%
18.60%
0.00%
0.00%
15.00%
21.74%
0.00%
23.53%
19.44%
0.00%
0.00%
5.88%
0.00%
0.00%
26.32%
10.13%
16.84%
30.77%
14.29%
15.38%
24.24%
13.72%
14.28%
13.04%
17.80%
14.47%
8.82%
13.21%
17.07%
15.60%
18.31%
5.88%
18.29%
12.20%
17.59%
21.13%
7.89%
13.33%
[23]
Zip code 14139 had the highest percentage of lis pendens filings (100%) which resulted in a deed transfer as a
result of foreclosure. Out of the more densely populated zip codes, 14210 had the highest percentage
(56.92%). Zip code 14222 had the highest percentage (29.41%) of lis pendens filings which ended in a deed
transfer to stop foreclosure. Zip codes 14026 and 14102 saw all of their 2007 lis pendens filing cancelled.
Out of Buffalo zip codes, 14202 had the highest percentage of lis pendens cancellations (66.67%). Zip code
14169 had the highest percentage of 2007 lis pendens reach either a judgment with no resolution or no
resolution at all (100%). Twenty-six zip codes saw at least 1 in 3 lis pendens filings reach no resolution. 48
out of 62 zip codes (77%) saw at least 1 in 5 lis pendens filings reach no resolution. Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[24]
2008 Findings
Brief Overview of Lis Pendens in Erie County Municipalities
There were 2,313 unique lis pendens filings for Erie County in 2008. While this number represents a
decrease of 397 filings from 2007, concluding that there were fewer properties in danger of foreclosure in
2008 is not necessarily correct. The enactment and implementation of the NYS Subprime Mortgage Law,
Chapter 472 of the Laws of 2008 almost certainly impacted the number of foreclosures filed in that year.
The law requires “lenders or mortgage loan servicers…to send homeowners with high-cost, subprime, and
non-traditional home loans a notice at least 90 days prior to the commencement of a legal action.”18 This
posed a de facto moratorium from September to December 2008 on lis pendens filings for high-cost,
subprime, and non-traditional home loans. We may then hypothesize that the decrease from 2007 to 2008 is
at least, in part, artificial. Further study in 2009 will prove useful in determining the degree to which the law
impacted the total number of lis pendens filed in 2008. Table 15 presents lis pendens filed in 2008 by
municipality.
Table 15. 2008 Lis Pendens Filings Sorted by Municipality in Erie County
Municipality
# of Filings
Buffalo
Cheektowaga
Amherst
Tonawanda (town)
Hamburg
West Seneca
Lancaster
Evans
Clarence
Lackawanna
Orchard Park
Tonawanda (city)
Grand Island
Concord
Eden
Boston
Newstead
Aurora
Elma
Alden
Colden
Collins
Holland
North Collins
Marilla
Brant
Sardinia
Wales
894
289
210
185
106
87
83
57
51
45
38
38
29
26
25
22
20
17
17
12
12
10
8
8
7
6
6
5
% Share of All Filings Occupied Housing Units
38.65%
12.49%
9.08%
8.00%
4.58%
3.76%
3.59%
2.46%
2.20%
1.95%
1.64%
1.64%
1.25%
1.12%
1.08%
0.95%
0.86%
0.73%
0.73%
0.52%
0.52%
0.43%
0.35%
0.35%
0.30%
0.26%
0.26%
0.22%
122,720
40,045
45,076
33,278
21,999
18,328
15,053
6,639
9,154
8,192
10,277
6.741
6,898
3,264
2,855
2,997
3,371
5,421
4,186
3,278
1,262
1,754
1,332
1,254
2.021
710
944
1,116
Population
292,648
94,019
116,510
78,155
56,259
45,920
39,019
17,594
26,123
19,064
27,637
16,136
18,621
8,526
8,076
7,897
8,404
13,996
11,304
10,470
3,323
8,307
3,603
3,376
5,709
1,906
2,692
2,960
18
Keefe, Kirsten, www.empirejusticecenter.org, “Foreclosure Prevention and Responsible Lending Act of 2008
Summary of Program Bill #44 (A.10817-A/S.8143-A)”
[25]
The City of Buffalo had 894 lis pendens filings for a total share of 38.74% of all lis pendens filed in Erie
County in 2008. This is a decrease of 216 filings from 2007, but still ranks Buffalo as the most heavilyaffected municipality. Buffalo’s inner-ring suburbs again experienced the second-most significant incidence
of filings: Cheektowaga had 289 filings (12.5%), Amherst had 210 filings (9.1%), Town of Tonawanda had
185 filings (8.0%), Hamburg had 106 filings (4.6%), and West Seneca had 87 filings (3.8%). In total, the
inner-ring suburbs had 38.0% of all lis pendens filed in Erie County in 2008. Lancaster also had a significant
number of filings: 83, or 3.59%. All Erie County municipalities had at least five lis pendens filed in 2008.
Brief Overview of Lis Pendens in Erie County Zip Codes
Table 16 provides a list of the top twenty zip codes ranked by the number of 2008 lis pendens filings. These
findings differ slightly from 2007. Table 16. Top 20 Zip Codes by # of Lis Pendens Filings in 2008
Zip code 14215 located principally in the
City of Buffalo—and stretching into a
part of Cheektowaga—still claimed the
highest number, with 238 filings (10.3%
of the total). Zip code 14225, located
almost completely in the Town of
Cheektowaga, usurped zip code 14211
with the second highest number of filings
at 125 (5.4% of the total).
Falling to third, zip code 14211 had 122
filings (5.2% of the total). Zip code 14211
is located principally on the east side of
Buffalo and extends into an area of
Cheektowaga.
Originators of Mortgages Entering the
Foreclosure Process
Rank
1
2
3
4
5
6 (t)
6 (t)
8
9
10
11
12
13
14
15
16
17
18
19
20 (t)
20 (t)
Zip Code
14215
14225
14211
14207
14150
14213
14221
14075
14220
14206
14224
14086
14226
14217
14223
14043
14216
14214
14210
14208
14218
# of Filings Occupied Housing Units
238
17,420
125
15,672
122
11,887
98
9,832
94
18,857
90
10,076
90
20,627
87
16,442
82
10,478
74
10,270
72
16,064
66
10,659
63
12,555
60
10,779
59
9,971
54
10,789
52
10,912
51
8,310
49
6,764
44
5,102
44
8,672
Population
44,311
35,861
29,585
22,913
35,861
25,811
29,585
42,269
26,531
22,767
40,465
28,665
29,393
24,580
24,035
26,324
23,520
22,067
16,666
13,292
20,179
The number of lenders who originated mortgages that descended into the foreclosure process in Erie County
in 2008 decreased from 2007, falling by 27 to total 362. Table 17 shows the top forty loan originators in Erie
County and whether or not they were listed on HUD’s 2005 list of subprime lenders19. The top forty lenders
originated 1,383 mortgages that went into foreclosure in 2008, representing 59.7% of the total market share.
This is roughly the same percentage from 2007. Ten of the originating lenders (25%) are on the HUD
subprime list, a decrease of four from 2007. HSBC Mortgage Corporation was once again the top
originating lender for lis pendens filings with 206, or 8.9% of the total.
19
See footnote 3, HUD List Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[26]
Devere Capital Corporation originated the second most loans with 85, or 3.7% of the total. M&T fell by one
spot from 2007, originating the third-most at 80, or 3.5% of the total number of mortgages that fell into the
foreclosure process in 2008.
Table 17. Top 40 Loan Originators by # of Lis Pendens Filings in 2008
Rank
1
2
3
4
5 (t)
5 (t)
7
8
9
10
11 (t)
11 (t)
13 (t)
13 (t)
15
16
17 (t)
17 (t)
19
20 (t)
20 (t)
22 (t)
22 (t)
24 (t)
24 (t)
26
27 (t)
27 (t)
27 (t)
27 (t)
31
32 (t)
32 (t)
34 (t)
34 (t)
36
37 (t)
37 (t)
37 (t)
37 (t)
Originating Lender
# of Filings
206
DEVERE CAPITAL CORPORATION
85
80
FIRST PRIORITY MORTGAGE INC
58
46
WELLS FARGO BANK NA*
46
MARINE MIDLAND MORTGAGE CORP
44
KEYBANK NATIONAL ASSOCIATION
43
40
HOMESTEAD FINANCIAL SERVICES INC
37
AMERICAS WHOLESALE LENDER
35
FREMONT INVESTMENT & LOAN*
35
BENEFICIAL HOME SERVICE CORP
34
FLEET NATIONAL BANK
34
ABN AMRO MORTGAGE GROUP INC
33
MANUFACTURERS & TRADERS TRUST CO
32
28
GMAC MORTGAGE CORPORATION
28
SPECTRUM HOME MORTGAGE CORP
27
ACCREDITED HOME LENDERS INC*
26
EQUIFIRST CORPORATION*
26
ARGENT MORTGAGE COMPANY LLC*
24
FIRST FRANKLIN 24
CHARTER ONE BANK FSB
23
NEW CENTURY MORTGAGE CORPORATION
23
SIBLEY MORTGAGE CORPORATION
21
BNC MORTGAGE INC
20
CENTEX HOME EQUITY LLC*
20
20
KEYCORP MORTGAGE INC
20
CITIBANK NA 19
AMERIQUEST MORTGAGE COMPANY*
18
CHARTER ONE BANK NA
18
BANK OF AMERICA NA
17
SIBLEY CORPORATION
17
AEGIS FUNDING CORPORATION*
16
CITIMORTGAGE INC
15
EMPBANQUE CAPITAL CORP
15
MORTGAGE LENDERS NETWORK USA INC*
15
NOVASTAR MORTGAGE INC*
15
*On 2005 HUD Subprime List
[27]
231 individual lenders were listed as the plaintiffs on lis pendens filings in Erie County in 2008. Table 18
shows the top 25 plaintiffs on lis pendens filings. These top 25 plaintiffs represent 1,731 or 74.8% out of the
2,313 total lis pendens filed in 2008. The top six read similarly to 2007 with one exception. Countrywide
Home Loans, which was number 5 in 2007, fell to number 8 in 2008. Otherwise, the plaintiffs are the same
even if the ranking is slightly different. The number one plaintiff on lis pendens filings was HSBC, as
represented by two divisions. If combined, HSBC Mortgage Corp and HSBC Bank USA were the plaintiffs
on 332 lis pendens together (14.4%), or 240 and 92 (10.4% and 3.9%), respectively. CitiMortgage Inc was
next as the lender on 234 (10.1%) filings. Third was Wells Fargo with 133 (5.8%) filings. Deutsche Bank was
fourth with 105 (4.5%) filings, M&T Bank was fifth with 99 filings, (4.3%) and the previously mentioned
HSBC Bank USA division, if taken alone, would be sixth.
Table 18. Top 25 Plaintiffs by # of Lis Pendens Filings in 2008
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17 (t)
17 (t)
17 (t)
20
21
22
23
24
25
# of Filings
240
CITIMORTGAGE INC
234
WELLS FARGO BANK NA
133
105
M&T BANK
99
HSBC BANK NA
92
US BANK NA
91
81
CHASE HOME FINANCE LLC
65
BANK OF NEW YORK
54
WELLS FARGO BANK NA
52
BANK OF AMERICA
51
MIDFIRST BANK
50
RBS CITIZENS
48
BENEFICIAL HOMEOWNER SERVICE CORP
43
KEYBANK NATIONAL ASSOCIATION
42
PHH MORTGAGE CORP
36
LASALLE BANK NA
36
GMAC MORTGAGE LLC
36
33
WASHINGTON MUTUAL BANK
32
BAYVIEW LOAN SERVICING LLC
27
26
STATE OF NEW YORK MORTGAGE AGENCY
25
19
The total number of lis pendens on which these top six lenders were the plaintiffs was 903, or 39.0% of the
total 2,313 from 2008. As in 2007, these lenders actually originated far fewer mortgages in Erie County,
assuming most of these loans later in the assignment and/or securitization process. The number of loans
originated by the top six plaintiffs that went into foreclosure in Erie County in 2008 was 275, or 11.9% of the
total 2,313—a significantly smaller percentage. Deutsche Bank actually originated no mortgage loans that
entered the foreclosure process in Erie County in 2008 but filed lis pendens on a total of 105.
[28]
Lis Pendens Filings per Year of Origination
Figure 10 indicates that mortgages originated recently were once again more likely to descend into the
foreclosure process in 2008. In fact, mortgages originated after the year 2000 comprise 1,674 or 72.3% of the
total 2,313 lis pendens filed. As in 2007, the highest originating year was 2005 with 344 (14.9%) mortgages
entering foreclosure in 2008. A close second was 2006 with 335 (14.5%) mortgages. The number of filings
for the year 2007 fell to 164 (7.1%), and there were only 8 (0.3%) filings for the year 2008.
Interestingly, there were thirty loans that started the foreclosure process in 2008 that were originated after
October 1, 2007. This means that thirty mortgages failed within one year after origination.
Figure 10. Number of 2008 Lis Pendens Filed in Erie County by Year of Mortgage Origination
Subprime Loans entering the Foreclosure Process in Erie County in 2008
Brief Overview of Subprime and High-Cost Loans in Erie County
There were 618 mortgages that exceeded the threshold for subprime or high-cost status originated in the
years 2003-2008 that entered the foreclosure process in 2008, or 46.9% of all loans (1,316) from that time
period. Even though this is a fragment of all loans with 2008 lis pendens filings, the subprime or high-cost
threshold-exceeding loans still account for 26.7% of all lis pendens filed (2,313). This number is a decrease of
106 from the previous year. Again, making deductions of the degree to which the foreclosure crisis is
impacting Erie County only from this decrease is problematic due to the enactment and implementation of
the Subprime Mortgage Law, Chapter 472 of the Laws of 2008. Any justifiable comment on the number
of lis pendens filed on subprime and high-cost loans in 2008 must make note of the artificial conditions that
the implementation of this law imposed on the total market. This decrease of 106 does not necessarily
indicate that there were fewer properties in danger of entering the foreclosure process in 2008, only that there
were fewer legally recorded given the unique circumstances.
[29]
Of the total number of subprime and high-cost threshold-exceeding mortgages, 213 (34.5%) exceeded the
threshold for first lien subprime status (T-Bill +3). 145 (23.5%) mortgages exceeded the threshold for second
lien subprime status (T-Bill +5). 56 (9%) mortgages exceeded the threshold for first lien high-cost (T-Bill
+8), and 204 (33%) exceeded the threshold for second lien high-cost (T-Bill +9). It is important to note
again that we could not make the distinction between first and second lien mortgages in our analysis. The
thresholds are used to provide a uniform and recognizable measure for individual interest rate only.20
Figure 11. High-Cost and Subprime Loans from 2003-2008 with 2008 Lis Pendens Filings
33%
34%
Subprime +3
Subprime +5
High Cost +8
9%
23%
High Cost +9
Subprime and High-Cost Loan Originators on 2008 Lis Pendens Filings
Of the 362 lenders who originated a mortgage that entered the foreclosure process in 2008, 141 (40%)
originated at least one mortgage from 2003-2008 that exceeded the threshold for a subprime or high-cost
loan. Table 19 lists the top twenty originators of subprime or high-cost threshold-exceeding loans that had a
lis pendens filing in 2008. The top twenty lenders originated 376 (60.8%) out of the total 618 mortgages that
met the threshold for a subprime or high-cost loan. Again, Wells Fargo Bank originated the most mortgages
that exceeded the threshold for first lien subprime with a total of 16. The number two originator was
Fremont Investment and Loan with five. JP Morgan Chase Bank originated the most mortgages that
exceeded the threshold for second lien subprime with 13. The number one originator of mortgages that
exceeded the second lien subprime threshold from 2007, BNC Mortgage Inc., fell to number two in 2008
with 11 loans. Both Fremont Investment and Loan and Option One Mortgage Corporation were the
originators of six mortgages that exceeded the threshold for high-cost first lien in 2008. Fremont Investment
and Loan also originated the highest number of mortgages that exceeded the threshold for high-cost second
lien with 17.
20
See Disclaimer pp. 5-6 (bold text)
[30]
In terms of the total number of subprime and high-cost threshold-exceeding mortgages, Wells Fargo
originated the most of any other originating lender with 34 overall. There were three originating lenders—
BNC Mortgage Inc., Intervale Mortgage Corporation, and Wells Fargo Financial Credit Services New York
Inc—that had no prime mortgages go into foreclosure in 2008. Though this does not necessarily mean that
these three companies originated only subprime or high-cost threshold-exceeding loans in total, we may
definitively say that the subprime or high-cost threshold-exceeding loans originated by these companies were
more likely to enter the foreclosure process in 2008. Many other lenders featured on the list from 2007 were
also active in Erie County in 2008.
Table 19. Top 20 Originators of Subprime and High-Cost Loans by # of 2008 Lis Pendens Filings Subprime +3 Subprime +5 High Cost + 8 High Cost + 9 (% Share)
(% Share)
(% Share)
(% Share)
Total
Rank
Originating Lender
1 WELLS FARGO BANK NA*
16 (47.1)
5 (14.7)
4 (11.8)
9 (26.5)
34
2 FREMONT INVESTMENT & LOAN*
5 (17.9)
0 (0.0)
6 (21.4)
17 (60.7)
28
3 (t) JPMORGAN CHASE BANK
6 (22.2)
13 (48.1)
0 (0.0)
8 (29.6)
27
3 (t) OPTION ONE MORTGAGE CORP*
4 (14.8)
6 (22.2)
6 (22.2)
11 (40.7)
27
5 EQUIFIRST CORPORATION*
6 (24.0)
7 (28.0)
2 (8.0)
10 (40.0)
25
6 FIRST FRANKLIN
4 (18.2)
4 (18.2)
2 (9.1)
12 (54.5)
22
7 (t) ACCREDITED HOME LENDERS INC*
7 (35.0)
2 (10.0)
4 (20.0)
7 (35.0)
20
7 (t) BNC MORTGAGE INC
4 (20.0)
11 (55.0)
2 (10.0)
3 (15.0)
20
7 (t) NEW CENTURY MORTGAGE CORP*
3 (15.0)
2 (10.0)
2 (10.0)
13 (65.0)
20
10 ARGENT MORTGAGE COMPANY LLC*
9 (47.4)
3 (15.8)
0 (0.0)
7 (36.8)
19
11 MORTGAGE LENDERS NETWORK USA INC*
7 (58.3)
0 (0.0)
2 (16.7)
3 (25.0)
12
12 (t) AMERIQUEST MORTGAGE COMPANY*
1 (9.1)
1 (9.1)
0 (0.0)
9 (81.8)
11
12 (t) COUNTRYWIDE HOME LOANS
3 (27.3)
4 (36.4)
0 (0.0)
4 (36.4)
11
12 (t) NOVASTAR MORTGAGE INC*
1 (9.1)
1 (9.1)
0 (0.0)
9 (81.8)
11
15 (t) AEGIS LENDING CORPORATION*
1 (10.0)
0 (0.0)
0 (0.0)
9 (90.0)
10
15 (t) FIRST FRANKLIN FINANCIAL CORP*
2 (20.0)
3 (30.0)
1 (10.0)
4 (40.0)
10
15 (t) INDYMAC BANK FSB
5 (50.0)
1 (10.0)
1 (10.0)
3 (30.0)
10
15 (t) WILMINGTON FINANCE*
2 (20.0)
2 (20.0)
4 (40.0)
2 (20.0)
10
19 CENTEX HOME EQUITY COMPANY LLC*
3 (33.3)
0 (0.0)
4 (44.4)
2 (22.2)
9
20 (t) AMERICAS WHOLESALE LENDER
3 (37.5)
0 (0.0)
1 (12.5)
4 (50.0)
8
20 (t) BENEFICIAL HOMEOWNER SERVICE CORP
5 (62.5)
2 (25.0)
1 (12.5)
0 (0.0)
8
20 (t) FIRST NATIONAL BANK OF ARIZONA
7 (87.5)
0 (0.0)
0 (0.0)
1 (12.5)
8
20 (t) INTERVALE MORTGAGE CORPORATION
0 (0.0)
2 (25.0)
3 (37.5)
3 (37.5)
8
20 (t) WELLS FARGO FIN. CREDIT SERVICES NY 3 (37.5)
4 (50.0)
0 (0.0)
1 (12.5)
8
73.9
80.0
67.5
58.7
96.2
91.7
76.9
100.0
87.0
79.2
80.0
61.1
39.3
73.3
71.4
90.9
71.4
83.3
45.0
22.9
23.5
80.0
100.0
100.0 *On 2005 HUD Subprime List Plaintiffs on Lis Pendens Filings on Subprime and/or High-Cost Loans in 2008
Of the 232 total lenders that were plaintiffs on all lis pendens filings in Erie County in 2008, 107 (46.1%)
were also plaintiffs on at least one lis pendens filing for a subprime and/or high-cost threshold-exceeding
loan. Table 20 shows the top ten plaintiffs on 2008 lis pendens on subprime and high-cost thresholdexceeding loans in Erie County. These top ten plaintiffs initiated the foreclosure process on 339 (54.9%)
subprime and/or high-cost threshold-exceeding mortgages. The top plaintiff in total number was again
Deutsche Bank National Trust Company with 82 foreclosure initiations on subprime and high-cost
threshold-exceeding loans, or 78.1% of all their lis pendens filings. For the second year in a row, Deutsche
Bank also filed lis pendens for the most mortgages that exceeded the second lien high-cost threshold (T-Bill
+ 9) with 43. Mortgages that exceed this threshold (the highest threshold in our analysis) totaled about 41%
of all Deutsche Bank’s foreclosure initiation activity in Erie County in 2008. It is of interest to note here once
[31]
again that Deutsche Bank actually originated no mortgages in Erie County in 2008, and assumed this high
number of very risky loans at some point later in the assignment and/or securitization process. US Bank NA
filed the second highest number of lis pendens for subprime and/or high-cost threshold-exceeding mortgages
with a total of 74, or 81.3% of all their foreclosure activity in Erie County in 2008. US Bank NA also filed
the highest number of lis pendens for mortgages that exceeded the threshold for first lien subprime (T-Bill
+3) with 23. Third in number, Wells Fargo Bank NA filed 69 lis pendens on subprime and/ or high-cost
threshold-exceeding mortgages. This was 51.9% of their foreclosure activity in Erie County in 2008.
Table 20. Top 10 Plaintiffs on 2008 Lis Pendens Filings on Subprime and High-Cost Loans in Erie County
Rank 1
2
3
4
5
6
7
8 (t)
8 (t)
10
US BANK NA
WELLS FARGO BANK NA
BANK OF NEW YORK
LASALLE BANK NA
BAYVIEW LOAN SERVICING LLC
BENEFICAL HOMEOWNER SERVICE CORP
CITIMORTGAGE INC
HSBC BANK USA NA
CHASE HOME FINANCE LLC Subprime + 3 Subprime + 5 High Cost + 8 High Cost + 9 (% Share)
(% Share)
(% Share)
(% Share)
Total
18 (22.0)
13 (15.9)
8 (9.8)
43 (52.4)
82
23 (31.1)
16 (21.6)
9 (12.2)
26 (35.1)
74
21 (30.4)
13 (18.8)
12 (17.4)
23 (33.3)
69
9 (33.3)
2 (7.4)
3 (11.1)
13 (48.1)
27
9 (34.6)
8 (30.8)
1 (3.8)
8 (30.8)
26
6 (35.3)
10 (58.8)
1 (5.9)
0 (0.0)
17
10 (62.5)
5 (31.3)
1 (6.3)
0 (0.0)
16
9 (64.3)
5 (35.7)
0 (0.0)
0 (0.0)
14
3 (21.4)
5 (35.7)
2 (14.3)
4 (28.6)
14
3 (23.0)
5 (38.5)
0 (0.0)
5 (38.5)
13
78.1
81.3
51.9
49.1
72.2
63.0
37.2
6.0
50.0
20.0 Lis Pendens Filings on Subprime and/or High-Cost Loans by Municipality in 2008
Table 21 shows the total number of subprime and/or high-cost threshold-exceeding lis pendens filings by
municipality, both as numerical totals and as a percentage of all lis pendens filings in 2008. As in 2007,
Buffalo had the highest number of subprime and/or high-cost threshold-exceeding foreclosure initiations in
2008 with 230. Amherst and Cheektowaga had the next highest with 69 and 68, respectively. This was an
increase of four for Amherst from 2007. Buffalo again experienced the highest number of lis pendens filings
for the four thresholds: 75 met or exceeded first lien subprime (T-Bill +3%), 70 met or exceeded second lien
subprime (T-Bill +5%), 12 met or exceeded first lien high-cost (T-Bill +8), and 73 met or exceeded second
lien high-cost (T-Bill +9%). These subprime and high-cost lis pendens filings were about a quarter (25.73%)
of all lis pendens filings for Buffalo in 2008. The municipality of Brant had the highest proportion (4 out of 6
or 66.67%) of subprime and/or high-cost threshold-exceeding lis pendens to all lis pendens. All Erie County
municipalities (except Holland) experienced at least one subprime or high-cost threshold-exceeding lis
pendens filing in 2008.
[32]
Table 21. 2008 Lis Pendens Filed on Subprime and/or High-Cost Loans by Municipality
Subprime +3 Subprime +5 High Cost + 8 High Cost + 9 % of all filings in municipality
(% Share)
(% Share)
(% Share)
(% Share)
Municipality
Total
Buffalo
75 (32.6)
70 (30.4)
12 (5.2)
73 (31.7)
230
25.7
Amherst
18 (26.1)
15 (21.7)
8 (11.6)
28 (40.6)
69
32.9
Cheektowaga
25 (36.8)
15 (22.1)
3 (4.4)
25 (36.8)
68
23.5
Tonawanda (town)
18 (39.1)
5 (10.9)
4 (8.7)
19 (41.3)
46
24.9
Hamburg
15 (42.9)
6 (17.1)
5 (14.3)
9 (25.7)
35
33.0
Lancaster
13 (37.1)
9 (25.7)
6 (17.1)
7 (20.0)
35
42.2
Clarence
3 (20.0)
5 (33.3)
3 (20.0)
4 (26.7)
15
29.4
West Seneca
5 (33.3)
1 (6.7)
1 (6.7)
8 (53.3)
15
17.2
Evans
7 (50.0)
2 (14.3)
0 (0.0)
5 (35.7)
14
24.6
Lackawanna
5 (45.5)
2 (18.2)
0 (0.0)
4 (36.4)
11
24.4
Orchard Park
2 (20.0)
1 (10.0)
2 (20.0)
5 (50.0)
10
26.3
Grand Island
3 (37.5)
2 (25.0)
1 (12.5)
2 (25.0)
8
27.6
Concord
1 (14.3)
4 (57.1)
1 (14.3)
1 (14.3)
7
26.9
Elma
2 (28.6)
1 (14.3)
2 (28.6)
2 (28.6)
7
41.2
Tonawanda (city)
4 (57.1)
0 (0.0)
1 (14.3)
2 (28.6)
7
18.4
Boston
2 (33.3)
2 (33.3)
1 (16.7)
1 (16.7)
6
27.3
Aurora
3 (60.0)
1 (20.0)
0 (0.0)
1 (20.0)
5
29.4
Eden
3 (60.0)
1 (20.0)
0 (0.0)
1 (20.0)
5
20.0
Brant
2 (50.0)
1 (25.0)
0 (0.0)
1 (25.0)
4
66.7
Marilla
1 (25.0)
2 (50.0)
1 (25.0)
0 (0.0)
4
57.1
Newstead
1 (25.0)
0 (0.0)
2 (50.0)
1 (25.0)
4
20.0
Colden
1 (33.3)
0 (0.0)
0 (0.0)
2 (66.7)
3
25.0
Collins
2 (66.7)
0 (0.0)
1 (33.3)
0 (0.0)
3
30.0
Alden
0 (0.0)
0 (0.0)
1 (50.0)
1 (50.0)
2
16.7
Sardinia
1 (50.0)
0 (0.0)
0 (0.0)
1 (50.0)
2
33.3
Wales
0 (0.0)
0 (0.0)
1 (50.0)
1 (50.0)
2
40.0
North Collins 1 (100.0)
0 (0.0)
0 (0.0)
0 (0.0)
1
12.5
Holland
0 (0.0)
0 (0.0)
0 (0.0)
0 (0.0)
0
0.0
Adjustable Rate Mortgages entering the Foreclosure Process in Erie County in 2008
Brief Overview of Adjustable Rate Mortgages Entering the Foreclosure Process in Erie County in 2008
In 2008, there were a total of 388 adjustable rate mortgages that entered the foreclosure process. As a
percentage of all lis pendens filed, adjustable rate mortgages comprised 16.8%. This is a decrease of 147 from
2007. Again, we must not take this simply at face value. The NYS Subprime Mortgage Law, Chapter 472
of the Laws of 2008 likely impacted this number as described above.
Adjustable rate mortgages comprised 16.8% of the total number of unique lis pendens filed in 2008.
Additionally, 62.8% of all the unique subprime lis pendens filed in 2008 were adjustable rate mortgages.
[33]
Initial Rates on Adjustable Rate Mortgages Entering the Foreclosure Process in Erie County in 2008
With the aid of the Erie County Clerk’s Office, we were able to collect interest rates for all but one adjustable
rate mortgage. Figure 12 shows the initial rates for ARMs that entered the foreclosure process in 2008. The
highest percentage (55%) of initial rates was in the range of 7.5% - 9.9%. This percentage is comparable to
2007. The range of 7.5% - 9.9% contained the greatest number of adjustable rate filings for both years.
Initial rates from 5% - 7.49% were the next highest, with a total percentage of 23.5% of all adjustable rate
filings. Eight mortgages had adjustable initial rates of 12.5% - 14.99% in 2008.
Figure 12. Initial Rates on Adjustable Rate Mortgages (ARMs)
Maximum Rates on Adjustable Rate Mortgages Entering the Foreclosure Process in Erie County in 2008
Figure 13 shows the maximum rates for ARMs that entered the foreclosure process in 2008. 76% of all
maximum rates fall somewhere between 12.5% - 17.49%, with slightly more concentrated in the higher range.
Very few ARMs had a maximum rate of 20% or higher (0.3%). However, there were also very few (about
one and a half percent of all ARMs) that were less than 10%. Overall, the general distribution was similar to
that of 2007.
Figure 13. Maximum Rates on Adjustable Rate Mortgages (ARMs)
[34]
2/28 Adjustable Rate Mortgages Entering the Foreclosure Process in Erie County in 2008
Figure 14 illustrates the number of lis pendens filings in 2008 on 2/28 ARMs by year of origination from
1999-2008. The greatest number of ARMs that began the foreclosure process in 2008 were originated from
2004-2006. A total of 166 ARMs were originated during this period (42.8% of all adjustable rate filings).
Similar to the findings for 2007, the year 2005 had the highest number of ARM originations (76). The years
1999-2003 comprise a relatively small percentage of ARM originations given the length of time, collectively
totaling 25.6%.
Figure 14. Number of Lis Pendens Filings in 2008 on 2/28 ARMs by Year of Origination
Change Intervals on Adjustable Rate Mortgages Entering the Foreclosure Process in 2008
Figure 15 exhibits the change intervals on ARMs entering the foreclosure process in 2008. 82.22% of the
ARMs reset every six months until the maximum interest rate is achieved. The next highest percentage
(15.21%) of ARMs reset yearly. Few ARMs reset every 24 and 36 months. Eight (2%) ARMs that entered
the foreclosure process in 2008 reset every month. These monthly resets can result in wildly fluctuating
mortgage payments.
[35]
Figure 15. Change Intervals on Adjustable Rate Mortgages
Originating Lenders of Adjustable Rate Mortgages Entering the Foreclosure Process in 2008
Of the 362 lenders who originated a mortgage that entered the foreclosure process in 2008, 103 (28.5%)
originated at least one adjustable rate mortgage. Table 22 lists the top fifteen originators of adjustable rate
mortgages that had a lis pendens filing in 2008. These top fifteen lenders originated 53.6% of all adjustable
rate mortgages. Fremont Investment & Loan and Option One Mortgage Corporation both originated 30
ARMs, tying them for the most in Erie County. These companies also occupied the number one and number
two spot in 2007. Though they both had fewer total mortgages in 2008, their relative positions at the top of
the list remained. Fremont Investment & Loan again had the highest percentage of ARMs (85.71%) out of all
loans originated, and M&T Mortgage Corporation again had the smallest percentage of loans that were ARMs
(15%). Both of these rankings were the same in 2007.
Table 22. Top 15 originators of ARMs that entered the foreclosure process in 2008
Rank
1 (t)
1 (t)
3
4
5 (t)
5 (t)
7 (t)
7 (t)
9 (t)
9 (t)
11 (t)
11 (t)
11 (t)
14 (t)
14 (t)
Originating Lender
FREMONT INVESTMENT & LOAN
NEW CENTURY MORTGAGE CORP
WELLS FARGO BANK NA
AMERIQUEST MORTGAGE CO
FIRST FRANKLIN
EQUIFIRST CORPORATION
ACCREDITED HOME LENDERS INC
CENTEX HOME EQUITY
AEGIS LENDING CORPORATION
JPMORGAN CHASE BANK
NOVASTAR MORTGAGE INC
ARGENT MORTGAGE COMPANY LLC
LONG BEACH MORTGAGE COMPANY
% of all Filings % of all by lender
ARM filings
# of ARMs
30
85.7
7.7
30
65.2
7.7
16
69.6
4.1
15
32.6
3.9
14
77.8
3.6
14
58.3
3.6
12
46.2
3.1
12
15.0
3.1
11
42.3
2.8
11
55.0
2.8
9
64.3
2.3
9
22.5
2.3
9
60.0
2.3
8
33.3
2.1
8
57.1
2.1
[36]
Plaintiffs of Adjustable Rate Mortgages Entering the Foreclosure Process in 2008
Of the 232 plaintiffs who initiated a foreclosure on a mortgage, 80 initiated at least one foreclosure on an
adjustable rate mortgage. Table 23 shows the top ten plaintiffs on 2008 lis pendens filings on adjustable rate
mortgages in Erie County. These top ten plaintiffs initiated 60.3% of all ARMs in 2008 (234 out of 388). As
in 2007, Deutsche Bank National Trust Company was again the top plaintiff with 58 (55.2% of their total) lis
pendens filings on ARMs in 2008. Fremont Investment & Loan only foreclosed on ARMs again in 2008.
Eight out of eight (100%) lis pendens filed by Fremont Investment & Loan in 2008 were ARMs.
Table 23. Top 10 Plaintiffs on 2008 Lis Pendens Filed on Adjustable Rate Mortgages
Rank
1
2
3
4
5
6
7
8 (t)
8 (t)
8 (t)
Plaintiffs on Lis Pendens DEUTSCHE BANK NATIONAL TRUST CO
WELLS FARGO BANK NA
US BANK NATIONAL ASSOCIATION
BANK OF NEW YORK TRUST CO
LASALLE BANK NATIONAL ASSOCIATION
OPTION ONE MORTGAGE CORPORATION
FREMONT INVESTMENT&LOAN
HSBC BANK USA NA
US BANK NATIONAL ASSOCIATION
# of ARMs
58
55
39
22
14
13
9
8
8
8
% of all filings by plaintiff
55.2
29.7
42.9
40.0
37.8
72.2
47.4
100.0
28.6
50.0 Adjustable Rate Mortgages Entering the Foreclosure Process in 2008 by Municipality
Table 24 shows lis pendens filings on ARMs by municipality. 26 out of the 28 Erie County municipalities had
at least one lis pendens filing for an ARM in 2008. Again, the municipality of Holland did not have any
ARMs entering foreclosure. North Collins also had no ARM filings. Buffalo had the highest number of lis
pendens filings for ARMs with 134, or 15% of the total. This is approximately the same percentage as 2007
in Buffalo—about 1 in 7 filings were ARMs in 2008 as well. Amherst had the second highest number of lis
pendens filings for ARMs with 48, or 22.86% of the total. This percentage of the total is less than in 2007.
The municipality of Elma had the highest percentage of ARMs (35.29%) but only six in total. Except for
Holland and Wales (where there were none), ARMs comprised at least 8 percent of all municipalities’ lis
pendens filings in 2008.
[37]
Table 24. 2007 Lis Pendens Filing on ARMs by Municipality
Municipality
# of ARMs
% of all Filings in Muncipality
Buffalo
Amherst
Cheektowaga
Tonawanda (town)
Lancaster
Hamburg
West Seneca
Clarence
Evans
Orchard Park
Elma
Newstead
Boston
Concord
Lackawanna
Grand Island
Tonawanda (city)
Marilla
Alden
Colden
Aurora
Eden
Wales
Brant
Sardinia
Collins
Holland
North Collins
134
48
42
36
20
17
13
12
10
8
6
5
5
5
5
4
4
2
2
2
2
2
1
1
1
1
0
0
15.0
22.9
14.5
19.5
24.1
16.0
14.9
23.5
17.5
21.1
35.3
25.0
22.7
19.2
11.1
13.8
10.5
28.6
16.7
16.7
11.8
8.0
20.0
16.7
16.7
10.0
0.0
0.0
Adjustment of Adjustable Rate Mortgages
Figure 16 shows the percentage of ARMs adjusting before the filing of a lis pendens versus the percentage of
ARMs which would have adjusted after the date the lis pendens was filed. A much higher percentage of
ARMs adjusted before the lis pendens was filed in 2008 than in 2007. In 2008, 285 total, or 73.45% of
mortgages adjusted before the lis pendens was filed. For 101 of these ARMs (26.03%), the lis pendens was
filed before the interest rate was scheduled to adjust. The highest number of mortgages (88) adjusted in 2007.
The second highest of number of mortgages (83) adjusted in 2008.
[38]
Figure 16. Percentages of ARMs Adjusting Before and After a Lis Pendens Filing in 2008
Fixed Rate Mortgages Entering the Foreclosure Process in 2008
Interest Rates on Fixed Rate Mortgages Entering the Foreclosure Process in 2008
Interest rate information was collected on 1,856 of the total 1,925 fixed-rate mortgages that entered the
foreclosure process in 2008. Figure 17 illustrates these mortgages by rate. The vast majority—1,514 or
81.57%—of the fixed rate mortgages had rates ranging from 5% - 9.99%. 263, or 14.17% had rates ranging
from 10% - 12.49%. Few fixed rate mortgages had very low or very high fixed interest rates. Only one had a
rate ranging 0% - 2.49%. There were five that were 15% or over.
Figure 17. Interest Rates of Fixed Rate Mortgages with 2008 Lis Pendens Filing
[39]
Conclusion
In this study, the WNYLC has endeavored to present a factual and accurate report of foreclosure
initiations in Erie County in years 2007 and 2008. We determined that this goal was worthy of the
resources and effort dedicated to this project. However, we could not have accomplished this goal
without the dedication and tireless work of our AmeriCorps VISTA volunteers.
Over the last 18 months, the WNYLC has received numerous requests for information about
foreclosures, further evidencing the need for accurate data. This research has provided us with the
opportunity to inform individuals, community organizations, elected leaders, real estate
professionals, law enforcement agencies, media, financial institutions, courts, regulators and others
about foreclosure trends in Erie County. The WNYLC has been able to use this study, along with
our legal and advocacy skills, to attract resources to Western New York to provide assistance to
homeowners facing foreclosure.
This process has solidified our belief that the uniform collection of reliable loan and foreclosure data
is imperative in order for municipalities, states, and the federal government to detect trends that can
negatively impact residents, neighborhoods and the health of our country’s entire economy.
Consumer advocates have pushed for improved data collection for years. Recent economic havoc,
wreaked in part by abusive lending and borrowing practices, clearly shows that current data
collection processes, oversight and regulatory practices are insufficient to uncover troubling trends
in a modern financial market.
It is our hope that, as we move forward to address homeowners and communities that have already
been harmed by foreclosures, steps are taken immediately to ensure that loan and foreclosure
information is collected regularly by state and federal agencies. It is extremely valuable information
that can help detect and target troubling lending patterns and foreclosure trends at an earlier stage in
the process rather than attempting to determine the impact and develop solutions after significant
harm has already occurred.
This report is available on our website www.wnylc.com and www.buffaloflipping.com.
[40]
Acknowledgements
We wish to acknowledge the collaboration, education, and resources provided by:
WNY AmeriCorps VISTA Program
Erie County Clerk’s Office
IOLA Fund of the State of New York
Peter Battaglia, Esq., Ticor Title Co., & NYS Bar Association Real Property Law Committee
Empire Justice Center
And the support of:
Senator William Stachowski
Assemblymember Sam Hoyt
Mayor Byron Brown, City of Buffalo
And Members of the Mayor’s Anti-Flipping Task Force
[41]
Maps and Exhibits
[42]
Location of lis pendens filed in Erie County, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[43]
Location of lis pendens filed in Alden, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[44]
Location of lis pendens filed in Amherst, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[45]
Location of lis pendens filed in Aurora, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[46]
Location of lis pendens filed in Boston, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[47]
Location of lis pendens filed in Brant, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[48]
Location of lis pendens filed in Buffalo, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[49]
Location of lis pendens filed in Cheektowaga, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[50]
Location of lis pendens filed in Clarence, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[51]
Location of lis pendens filed in Colden, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[52]
Location of lis pendens filed in Collins, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[53]
Location of lis pendens filed in Concord, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[54]
Location of lis pendens filed in City of Tonawanda, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[55]
Location of lis pendens filed in Eden, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[56]
Location of lis pendens filed in Elma, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[57]
Location of lis pendens filed in Evans, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[58]
Location of lis pendens filed in Grand Island, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[59]
Location of lis pendens filed in Hamburg, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[60]
Location of lis pendens filed in Holland, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[61]
Location of lis pendens filed in Lackawanna, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[62]
Location of lis pendens filed in Lancaster, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[63]
Location of lis pendens filed in Marilla, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[64]
Location of lis pendens filed in North Collins, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[65]
Location of lis pendens filed in Newstead, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[66]
Location of lis pendens filed in Orchard Park, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[67]
Location of lis pendens filed in Sardinia, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[68]
Location of lis pendens filed in Tonawanda, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[69]
Location of lis pendens filed in Wales, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[70]
Location of lis pendens filed in West Seneca, NY years 2007 and 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[71]
Top 20 zip codes by number of lis pendens filed in Erie County, NY year 2007 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[72]
Top 20 zip codes by number of lis pendens filed in Erie County, NY year 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[73]
Location of lis pendens filed on subprime mortgages in Erie County, NY year 2007 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[74]
Location of lis pendens filed on subprime mortgages in Erie County, NY year 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[75]
Location of lis pendens filed on subprime mortgages in Erie County, NY years 2007 & 2008 Western New York Law Center, Inc. 237 Main St. Suite 1130 Buffalo NY 14203
[76]
Exhibit A
[77]

WNYLC Foreclosure Study Years 2007-2008 - Anti

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