By Jon Chesto
The Patriot Ledger
For the first time in more than a year in Massachusetts, the foreclosure rate headed upward again when compared to the same month in the prior year.
The Warren Group reported that lenders and mortgage servicers filed 1,193 initial petitions to foreclose last month, a 5.9-percent increase from the number of petitions that were filed in October 2010. Meanwhile, 756 foreclosure deeds were recorded last month, a 35.7-percent increase from October 2010.
“We went through a time in the summer where it slowed down a bit, and we were hopeful (but) now it does seem to be picking back up again,” said Carolyn Sheppard, housing program director at Quincy Community Action Programs Inc.
Sheppard attributed the spike to the weak economy.
“We’re seeing more people who got into regular mortgages who now aren’t able to afford it because their unemployment benefits are running out,” Shepphard said. “Often their house is underwater, so even if they try to refinance, they owe more than the home is worth.”
Tim Warren, CEO of the Boston-based Warren Group, said this was the first time since September 2010 that the number of monthly foreclosures rose, year-over-year. He also said it was the first time since August 2010 that the number of monthly petitions rose from the same month in the prior year.
Warren said the increase was partly caused by the slowdown in foreclosures that happened at this time last year. Warren pointed to a state law that took effect in August 2010 that required lenders to give borrowers 150 days to address a mortgage default before moving ahead with a foreclosure. Before that law, the state required a 90-day waiting period.
Warren said it could take at least another two years before foreclosures return to normal levels in this state. But he said the problem is much worse in other states where there was a considerable amount of speculative residential construction.
Aaron Gornstein, executive director of the Citizens’ Housing and Planning Association in Boston, said much of the legal uncertainty that caused banks to move cautiously with foreclosures has been resolved. He also said many lenders are deciding that the borrowers won’t be able to catch up with the requisite payments and are giving up on efforts to make permanent modifications to defaulted loans.
“It’s certainly not good news because we think it’s going to lead to (dumping) more properties on the market,” Gornstein said. “It’s important to get these properties reoccupied as quickly as possible and to make sure they don’t become an eyesore or a nuisance.”
Read more: http://www.patriotledger.com/business/x1514730476/Foreclosure-rate-climbs-again-in-Massachusetts#ixzz1fDrZZDkR
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