People who have equity in their homes don't typically foreclose, and owners in NYC typically still do. Two reasons for that. First, property values in NYC haven't dropped as much as in other areas. Second, co-ops constitute a very large percentage of the purchasable housing in Manhattan (and in some of the outer boroughs as well). Nearly all co-ops subject you to a very invasive board approval process where you need to reveal everything there is to know about your income and assets. They want to know that you're making more than enough money to meet your expenses and that you have sufficient reserves to cover yourself through any period of hardship. Co-ops also usually require a sizable down payment (almost always at least 20%, sometimes even 100%). If you seem risky, you don't get in. So there's definitely less of an opportunity for shenanigans with exotic mortgage products and the like than in other cities.