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Boston Foreclosure Auctions Contributed to Spike in State



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By : John Cutts    99 or more times read
The pace of Boston foreclosure auctions contributed significantly to the spike in foreclosure activity in Massachusetts in April.

Although foreclosure activity in Boston neighborhoods like Dorchester and East Boston has slowed down, defaults and foreclosures have been surging substantially in the counties of Worcester and Plymouth.

Foreclosure auctions in Massachusetts stepped up sharply in April. Based on reports from a Boston-based market research enterprise, the number of completed foreclosures spiked by a staggering 80 percent from 764 deeds in April 2009 to 1,372 deeds in April this year. Similarly, the number of published auction notices spiked by a high 154.8 percent over the year.

In contrast, the number of foreclosure petitions fell by 6.2 percent from 2,581 petitions in March to 2,431 petitions in April. The total for petitions however marked an increase of 21 percent compared to the total in April 2009.

In the first 4 months, the total number of petitions was 9,008, higher by more than 4 percent compared to the same 4-month period last year. The total number of foreclosure deeds for the same period also increased by almost 37 percent.

In Massachusetts, the petition to foreclose is the first step of the foreclosure process and the deed of foreclosure is the last step for the lender in relation to the borrower. The foreclosure deed officially transfers the title of the property from the homeowner to the foreclosing lender or investor.

The sharp increase in the repossession of residential properties through Boston foreclosure auctions in April showed the efforts of banks to accelerate the completion of the foreclosures so they can take back the properties and resell them. With this relatively high number of REO in the Boston area, the process of how to purchase foreclosed homes for sale is a workable task to learn.

Volunteer lawyers in metro Boston have been trying their best to help rescue distressed homes, but the voluntary nature of the federal loan modification program has not been helpful. The lawyers said that the final decisions still belong to the mortgage lenders despite the completion of documents and the eligibility of borrowers.

Community advocates have been calling on banks to lower monthly payments so homeowners can cope and not default, but banks have been insisting that they are no longer the sole owners of the mortgages and that mortgage securities investors have entered the ownership picture.

Officers of the Merrimack Valley Project, a nonprofit that focuses on social justice, have observed that underwater mortgages have been contributing to the rise in defaults. With the refusal of lenders to modify, borrowers walk away especially if they no longer have savings to help them pay their monthly financial obligations.

The spike in foreclosure deeds also reflected efforts by lenders to shorten the time to complete the repossession process. A recent report said that foreclosures are now being completed in 4.6 months, a sharp acceleration from 8 months in the first months of 2008.

In addition, according to foreclosure researchers, more homes have been entering Boston foreclosure auctions after lenders ended their voluntary moratorium programs.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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