The Warren Group, who monitors such things, has revealed that Massachusetts foreclosure petitions jumped a dramatic 21.6% between February and March this year. Petitions are the first step down the foreclosure road, and when they reached 2581 in March just past, this rang the bell long and loud for troubled Massachusetts households.
This is almost double the number of foreclosure deeds filed in the same month – these also leaped by 51.4% to 1389 – the highest monthly number for over a year.
Taken together, these statistics reveal that the front and back end of the foreclosure process are competing in a bizarre race that bodes badly for the Bay State, and is exacerbating the difficulties already faced by neighborhoods plagued by abandoned, derelict properties.
Dean of the School of Public Policy and Urban Affairs at Northeastern University Barry Bluestone is concerned that a flood of REO homes could depress the market further and knock consumer confidence too, despite the fact that foreclosures are the end of a process that started months, even years ago.
"The sharp rise in deeds reflects many people who have been in trouble for a long time and have lost their homes," he said. “The deeds data does not portend what will happen in the future."
Paul Willen, a Senior Economist at the Boston Federal Reserve Bank is of the opinion that the Massachusetts housing market has already turned, even though it may be too late to save the victims of the downturn.
“I expect house prices to grow roughly at the rate of inflation or more over the next few years," he told me. “Even if you believe house prices were overvalued, we’ve seen a big correction."
The number of Bay State households entering foreclosure began increasing back in 2007, when the sub-prime market began to falter. This peaked in 2008, began to fall back during 2009, and then suddenly grew again to 3447 in the first quarter of 2010 – that’s a 24.6% year-on-year jump.
Is this something to be concerned about, or is it just an odious comparison with a period when lenders held back to see what HAMP would say?
Cambridge lawyer Paul Collier, who represents foreclosure-threatened home owners, holds a low road opinion. According to him, the latest statistics reveal a fresh wave of problems riding on the back of growing unemployment, and the failure of Washington’s efforts to stem the tide.
He believes that a large number of current foreclosure petitions relate to 2006 and 2007 sub-prime loans, and that lenders are disinterested in assisting their clients despite the government’s plan to incentivise them. Nobody is modifying these people’s mortgages, Collier told me. What we’re seeing is nothing more than a rush to continue to foreclose on the homes of people in economic stress.
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