ALBANY, N.Y. (AP) - The subprime mortgage meltdown is taking a toll in New York, with New York City and Long Island feeling the brunt, according to data released Friday.
Overall, the average rate of subprime mortgage foreclosures throughout the state is 9.7 percent, according to figures from the Federal Reserve Bank of New York.
That s about 2 percentage points above the national average, said Richard Deitz, a senior economist at the bank s Buffalo branch.
However, with the exception of certain pockets -- including the mid-Hudson Valley and the Capital District -- the foreclosure rate in upstate has generally been about 2 percentage points below the national average. That includes the major metropolitan areas of Buffalo, Rochester and Syracuse, Deitz said.
"Upstate just didn t have much of a housing boom," Deitz said. "It didn t catch much of the upside and probably isn t catching as much of the downside."
Subprime mortgages are a class of loans for borrowers with low credit ratings that became popular during the torrid housing market of the early 2000s. They typically have higher interest rates or rates that start low and then adjust to a higher rate after a fixed period of time.
Lately there has been a growing number of subprime mortgage defaults amid a cooling market that is leaving some buyers stuck with balances exceeding the worth of their home and others who had low introductory interest rates now facing higher rates they can t afford.
The figures released Friday show that there are 141,934 subprime loans for owner occupied houses statewide.
The zip code with the highest number of subprime loans covers parts of Canarsie and Flatlands in Brooklyn. Of the 1,930 subprime mortgages sold for homes there, 12.2 percent are in foreclosure, according to the bank s figures.
Brentwood on Long Island has the second highest number, with 1,782 loans and a 12.5 percent foreclosure rate. Bay Shore is third, with 1,484 loans and a 13.4 percent foreclosure rate.
Walker Valley in Ulster County shows the highest foreclosure rate, 57.1 percent, but that only accounts for seven mortgages. Other upstate communities show high foreclosure rates -- including Ashland in Greene County at 50 percent -- on relatively small numbers of loans.
Gene Tricozzi, president of the New York Association of Mortgage Brokers, said New York and Long Island have been harder hit because housing values there rose much more sharply than the rest of the state.
"We just didn t see that kind of appreciation in most other parts of the state," he said.
Lenders also have been tightening their standards, making it more difficult for borrowers who might be in over their heads to find buyers -- particularly on Long Island, where most lenders now require 10 percent down payments rather than the 5 percent they previously had accepted, Tricozzi said.
That s making it difficult for homeowners who want to get out of their mortgages to find buyers, he said.
The bank also released subprime mortgage default figures for New Jersey and Connecticut on Friday. They show an average foreclosure rate of about 8 percent in New Jersey and about 7 percent in Connecticut.
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