Massachusetts Foreclosures Spiked by More than 51 Percent

by Simon Lindsay on Foreclosures

Massachusetts foreclosures shot up by more than 51 percent in March based on data from a Boston-based real estate firm.

Completed foreclosures in the state jumped up to 1,389 units, marking a 51.4 percent increase from the 917 completed foreclosures in the previous month and a sharp 45-percent increase from the 957 units that became bank house foreclosures in March last year.

Boston analysts said that completed foreclosures in March marked the highest monthly number reached since May 2008. They said that the probability of investors finding and buying cheap properties in Massachusetts is greater now that actual foreclosures are rising.

The number of default notices in March also shot up to record levels as more Massachusetts residents struggle to make their monthly home loan payments. There were 2,581 homeowners who fell into mortgage default in March, an increase of almost 22 percent from the 2,122 delinquent homeowners in February and a jump of 8.4 percent from the 2,381 homes in default in March last year.

State officials and community advocates are concerned because the pace of Massachusetts foreclosures is still rising while the pace in other states has been slowing. In the first quarter, more than 7,000 houses and condo units defaulted, foreclosed or were repossessed from public auctions, a jump of 12 percent from the previous quarter.

If compared to foreclosure activity in the first quarter last year, the increase marked a staggering 60 percent, causing concern among market participants and officials.

Analysts in Massachusetts contend that among the causes of increases in foreclosure activity across the state is the emergence of banks from their struggling status. As they become financially stronger, they now have more time and resources to focus on their mortgage books and pursue foreclosure actions they deferred last year.

Banks recognize that foreclosures mean loan losses, and they figure that the earlier they recognize their losses on their books, the faster they can recover.

Additionally, the federal and state programs to cut down foreclosure activity have failed so far in helping distressed homeowners save their homes. After a few months of temporary reprieve from unaffordable loan payments, homeowners are left to scrounge for other remedies to continue preventing their homes from being repossessed by banks.

According to Northeastern University economists, there are still more than 323,000 Massachusetts residents looking for work, so the pace of Massachusetts foreclosures is still expected to rise in the coming months.

disclaimer