More than half of the 4,475 bank-owned properties in the New York City metropolitan area are still occupied by their former owners according to a report from foreclosure research firm RealtyTrac. And in the five boroughs, that figure is more than 70 percent. Comparatively, the average nationwide is 47 percent.
Hedge funds and private equity firms are eager to acquire real estate-owned, or REO, homes — properties taken by the bank after failing to sell at foreclosure auction. But they are also reluctant to deal with the hassle of evicting former homeowners, according to the New York Post.
And though New York has a relatively small number of REO homes, the pace at which the REO homes are actually repossessed reflects a long timeline for foreclosures rather than an end to the financial crisis, the Post said. The foreclosure timeline in New York City is one of the longest in the nation.
“You have this very dysfunctional foreclosure process,” Daren Blomquist, vice president at RealtyTrac, told the Post.
However, there are benefits — for both sides — to the non-eviction scenario. Banks manage to avoid the costs of maintaining a property, while former homeowners get to live rent or mortgage-payment free. [NYP] — Julie Strickland