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Foreclosures Hit The Hamptons

“No, it can’t happen here.” Time and time again this phrase has been repeated when it comes to the prospect of foreclosures in one’s neighborhood. And all too often it is a declaration proved wrong. One area on the East Coast where residents would least expect to see foreclosed properties is the Hamptons (on the east end of Long Island, New York). However, according to Newsday’s Randi Marshall, even this playground of the rich is no longer immune to the ongoing U.S. housing crisis. Marshall wrote Tuesday:

Mortgage defaults, foreclosures and the Hamptons were words that until recently were never mentioned in the same breath. Defaults and foreclosures took place elsewhere. But over the past year across the East End there’s been a noticeable increase in “lis pendens” — the first legal foreclosure notice — and even foreclosure auctions, which take place in courtrooms or on town hall steps…

According to data acquired by Newsday from Ashleigh Clark, the data acquisition manager for PropertyShark, a Brooklyn-based real estate research firm:

• From October 2007 to March 2008 (last month data available), the five towns on the East End reported 415 lis pendens, which was 30% higher than the prior six month period.
• There were 42 foreclosure auctions scheduled in the October-to-March time period across the five East End towns, up 40% from the previous six months.
• In the first quarter of this year, more than half of the homes to be auctioned on the East End were on the South Fork, in Southampton and East Hampton. Three of these were for properties with liens higher than $1 million. In 2007 on the East End, not one foreclosure auction for a property with a $1 million-plus mortgage took place.

Marshall noted that according to data from RealtyTrac, a national real estate data firm, banks took back eight homes in the first four months of 2008 in the five East End towns. No bank activity of this nature took place in the same period a year ago. The Newsday reporter wrote:

“In the last six to eight months, my calls have doubled and the amount of clients I have coming in to see me has doubled,” said Southampton bankruptcy and real estate attorney Alan C. Stein. “People look at the East End and they think it’s just money, but I’ve got clients that are on the verge of foreclosure in $3 million homes and they’re scraping together pennies just to make their mortgage payments.”

“Sell. Sell. Not Teldar, dummy— the house.”

Source:

“Foreclosures surprise Hamptons real estate market”
Randi F. Marshall
Newsday, June 3, 2008