Bank Owned Homes Dominating House Sales in Massachusetts- By: John Cutts
Bank owned homes are now dominating house sales in Massachusetts, as foreclosure postings continued to rise in the state, based on reports from real property tracking firm Warren Group, the Massachusetts Association of Realtors and other foreclosure analysts.
In October, foreclosure filings in the state increased by more than 17 percent from September to a total of 5,411 filings. The number also marked more than 49 percent of increase from filings in October last year. One housing unit in every 503 residential units across the state was hit with a default or foreclosure notice during the month, putting Massachusetts 15th in a ranking of U.S. states according to their rates of foreclosure.
Of the 5,411 filings, more than 2,500 units were hit with lis pendens notices while more than 2,000 units were given notices of trustee sales. A total of 886 units were taken back by the banks in October.
According to Worcester-based realtor Sara Kelleher Sears, the increase in foreclosures pulled down home prices in October by two percent from prices in September. She added that although house sales climbed up by 17 percent compared to sales in October last year, the lower prices of bank owned homes pulled down overall sales amounts.
According to Warren Group CEO Tim Warren and Kevin Cuff who leads the Massachusetts Mortgage Bankers Association, foreclosures in the state in recent months were no longer largely caused by risky mortgage loans such as adjustable rate mortgage loans or interest-only loans.
Cuff said that most foreclosures are now caused by loss of jobs, reduced income, unexpected expenses and significant losses in savings or investments. He added that the housing market will recover only if the employment situation makes a significant turnaround.
In October, the number of completed foreclosures increased by nearly 30 percent compared to foreclosures in September. But completed foreclosures marked a decrease of 8.5 percent compared to foreclosures in October last year.
In the northern areas of Central Massachusetts, multifamily residential buildings were the ones particularly hit at the start of the foreclosure crisis. Many of these buildings still remain among the foreclosure problems of the state.
To help the state solve the foreclosure problem, over 1,000 certified realtors in Massachusetts completed a Loss Mitigation Certificate course, according to Peter Haley, a top executive of the Central Massachusetts unit of the Massachusetts Association of Realtors. The course was designed to equip realtors in carrying out short sales and sales of bank owned homes more efficiently.
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John Cutts has been educated in the finer points of the foreclosure market over 5 years.