No Relief from Foreclosures

November 22nd, 2007

Although initially in Massachusetts, foreclosure deed numbers declined and the auction figures did not increase, the petitions have risen. A deed is a document that proves ownership and is used to transfer the property. A petition is a formal request made to a court or public agency asking them to do something. The filing of a petition is the first step in the foreclosure process. This indicates that foreclosures continue to be a festering sore in the local economy. Warren Group from Boston and publisher of Banker & Tradesman is also provider of real estate details of New England. The overview is from their report covering the months of September and August this year.

The final step in the foreclosure process is deeds. It increased by 143.8%. Last year the number was 276. This year it is 673. In August it made a bigger jump to 1,018. Foreclosure announcements increased by 57.3%. In September 2006 it was 599 but this year it rose to 1,214. Beyond August petition data is not as yet available.

The Warren Group has been collecting statistics from 2005. The month of August this year saw the highest number with 3,115 petitions. It was rise of 75.5% from August 2006 and 25.3% from July 2007. However the point of interest is that foreclosure deeds are slowing down most probably because lenders are not too keen to allow the hammer to fall. Perhaps they are listening to Governor Deval Patrick’s plea about going slow. Whatever the cause the results give cause for hope.

The foreclosure crisis with its jumbo numbers has affected all and it is to the interests of lenders to go slowly. The sub-prime loans were doled out like peanuts to all and sundry goaded by commissions and investment possibilities. Nobody bargained that so many houses would crumble like ninepins. This led to plugging of incoming income from monthly mortgage payments. There developed a cash crunch. The lenders found them stuck with worthless property as value began to fall. Criminal activity ripped the houses of whatever equity was left. With thousands becoming homeless the authorities became alarmed. Tax coffers began to sound empty and the police was not equipped to tackle problems of deserted neighbourhoods. The law too is finding loopholes to catch the lenders. Taking all this into consideration it is too the interest of the lenders to play cool.

Via