New York's Cooperative and Condominium Community
More than 1,000 pre-foreclosure notices have been filed against homeowners in Brooklyn since the start of 2022, when a foreclosure moratorium — enacted due to the devastating effects of the COVID-19 pandemic — came to an end.
As homeowners struggle to recover from a loss of work or income brought on by the pandemic, mortgage default rates could be nearing, or even overtaking, those seen after the 2008 financial crisis, a supervising attorney at The Legal Aid Society tells Brownstoner.
In the first three months of the year, 501 pre-foreclosure notices were filed on individual co-op and condo units, and townhouses with one, two or three units in Brooklyn, while 30 actual foreclosures took place, according to data compiled by PropertyShark. Then, between April and the end of June, another 508 pre-foreclosure notices were issued, and 17 properties were foreclosed on. Brooklyn is typically the borough that experiences the most foreclosures citywide, but the latest PropertyShark data shows 124 of the 199 foreclosures that took place over the past three months were in Queens.
The Brooklyn properties that have been foreclosed on this year were spread across the borough, with the highest concentration in the 11207 ZIP code, which covers parts of East New York and Bushwick, where there were three. According to city data, residents in parts of East New York, Cypress Hills, Brownsville and Bushwick face some of the highest risks of displacement citywide. In East New York, the median income is below the citywide median household income at $41,564, and just 25% of residents own their homes. In Bushwick, that number is even lower, at 14%.
Despite the moratorium being in effect through 2021, there were still 1,515 notices filed against Brooklyn homeowners that year and 29 homeowners were foreclosed on. According to PropertyShark's Marianne Moraru, the foreclosures that took place during the moratorium were mostly the result of common charge liens — which occur when the owner of a condo or co-op unit fails to pay a common monthly charge for several months in a row — not mortgage liens.
Oda Friedheim, a supervising attorney in The Legal Aid Society’s Foreclosure Prevention Unit, tells Brownstoner that while she didn’t have an exact number, delinquencies across the city are generally up. “Some say that mortgage defaults exceed those that occurred in 2008 after the crash. Based on what I note in speaking to struggling homeowners, many are still recovering from the loss of employment and or reductions in hours as a result of COVID.”
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