Foreclosures Dropped in Massachusetts

foreclosure in massachusetts

The scenario is definitely an optimistic one. Foreclosures have dropped in Massachusetts. The number of foreclosures took a plunge in Massachusetts in May. This has happened for the second month in a row, according to the Warren group.

In May, 582 foreclosure filings were recorded. This is a 58.6 percent decline from what was recorded in May 2008 (1,405) and a drop of 24.3 per cent from what was registered in April 2008. Statewide foreclosure filings have plunged by 26.3 per cent — 4,110 – as compared to the corresponding period last year (5,576).

Timothy M. Warren Jr., Warren Group’s CEO said this is encouraging. At last foreclosures had hit a low since 2007. Warren said that the primary reason for this is lenders have realized that foreclosures are costly and should be avoided at all cost. But there is still concern about rising unemployment. Unless people have jobs, they will not be able to make mortgage payments, and that will definitely accelerate foreclosures.

Some also attribute this to a decision of Massachusetts Land Court to invalidate two foreclosures as the lenders could not show proof of their title. Other lenders are now wary and they have put a stop to sale of foreclosed homes. Real estate agent Kristen Casucci said this has put a stop to most foreclosures. Even title companies are hesitant to insure titles because of the pending law suits.

This has become a vicious cycle what with lenders unable to provide title to purchased properties. That means purchasers won’t be able to avail of finance. Even lenders are unable to get buyers for those properties.

Foreclosure filings may have dropped but petitions have gone up. A petition is the first stage in the foreclosure process. In May, 2,329 petitions were filed, which is almost six times the number that was filed last year. This sharp rise can be attributed to the right-to-cure law that came into effect in May. This law made it mandatory for lenders to give 90 days to borrowers to catch up on the missed loan payments. This also led to a temporary drop in foreclosures.

Nicolas Retsinas, director of Harvard University’s Joint Center for Housing Studies, said that although foreclosures have dropped, the crisis is far from being over. The economy has not recovered. Jobs have not been created as a result of which homeowners are not being able to pay the mortgage payments. This is definitely not the end to the foreclosure problem.