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Foreclosure Filings Surging in State
1st nine months of 2006 top all of '05
By Kimberly Blanton, Globe Staff | November 15, 2006
Foreclosure filings against Massachusetts homeowners surged to nearly 13,000 through September, already surpassing 2005's count, and were prevalent in rural towns in Central and Western Massachusetts and in working-class cities with large minority populations across the state.
Filings increased 54 percent in the first nine months of 2006, compared to the same period last year, according to a monthly report yesterday from ForeclosuresMass.com, which collects data in state Land Court.
"I don't think we have hit the peak yet," predicted Jeremy Shapiro, the president of ForeclosuresMass.com.
Foreclosure filings do not mean the imminent loss of property for a homeowner. Once they receive notice from a bank or mortgage company, homeowners may be able to work out a refinancing plan with their financial institution or sell the home and pay off the loan, averting foreclosure.
But with mortgage interest rates higher than they were a year ago, Shapiro said, "There are still many homeowners with adjustable-rate mortgages that are pushing up their mortgage payments and squeezing their household budgets."
Housing specialists said the increases -- September filings this year are more than double two years ago -- are alarming. Yet the percent of Massachusetts' homeowners facing foreclosure remains below the US rate and below the state's rate during the early-1990s housing recession.
The worrisome trend has largely spared wealthy communities. In Andover, Belmont, Lenox, Lincoln, Shelburne, and Wellesley, six or fewer filings were made for every 10,000 people.
There were 32 to 53 per 10,000 in working-class cities with large minority populations such as Brockton, Lawrence, Lowell, and Lynn.
In western and central Massachusetts, the problem was also acute. More than a dozen communities -- from Fitchburg and Athol not far from New Hampshire to Springfield near the Connecticut border -- had at least 40 foreclosures per 10,000. The highest, Middlefield, had one foreclosure among 549 residents.
Foreclosures filings can be "more significant" in these towns, Shapiro said, because "everyone knows everyone."
During the accelerating housing market, many people were desperate to buy a house, and credit was easy, though many could not afford the mortgages, once the adjustable rates began to increase, housing specialists and counselors said.
In central and western Massachusetts, where house prices historically were low but took off during the boom, property flipping and investment scams compounded problems.
Barry Bluestone, dean of the School of Social Science, Urban Affairs and Public Policy at Northeastern University, said there was a clear pattern in the foreclosure data: Cities with big minority populations or residents of modest means had more of them.
In Massachusetts, less than one-half percent of all mortgages were in foreclosure in June 2005, compared with 1 percent nationwide, said the Massachusetts Bankers Association. But by June 2006, Massachusetts' rate increased, to 0.63 percent, while the nation's was the same.
Michael Fratantoni, the chief economist for the Mortgage Bankers Association of America, in Washington, D.C., predicted they would "level off," if the United States and Massachusetts economies continue growing at a good clip in 2007.
Kimberly Blanton can be reached at blanton@globe.com.
? Copyright 2006 Globe Newspaper Company.
http://www.boston.com/business/articles/2006/11/15/foreclosure_filings_surging_in_state/
1st nine months of 2006 top all of '05
By Kimberly Blanton, Globe Staff | November 15, 2006
Foreclosure filings against Massachusetts homeowners surged to nearly 13,000 through September, already surpassing 2005's count, and were prevalent in rural towns in Central and Western Massachusetts and in working-class cities with large minority populations across the state.
Filings increased 54 percent in the first nine months of 2006, compared to the same period last year, according to a monthly report yesterday from ForeclosuresMass.com, which collects data in state Land Court.
"I don't think we have hit the peak yet," predicted Jeremy Shapiro, the president of ForeclosuresMass.com.
Foreclosure filings do not mean the imminent loss of property for a homeowner. Once they receive notice from a bank or mortgage company, homeowners may be able to work out a refinancing plan with their financial institution or sell the home and pay off the loan, averting foreclosure.
But with mortgage interest rates higher than they were a year ago, Shapiro said, "There are still many homeowners with adjustable-rate mortgages that are pushing up their mortgage payments and squeezing their household budgets."
Housing specialists said the increases -- September filings this year are more than double two years ago -- are alarming. Yet the percent of Massachusetts' homeowners facing foreclosure remains below the US rate and below the state's rate during the early-1990s housing recession.
The worrisome trend has largely spared wealthy communities. In Andover, Belmont, Lenox, Lincoln, Shelburne, and Wellesley, six or fewer filings were made for every 10,000 people.
There were 32 to 53 per 10,000 in working-class cities with large minority populations such as Brockton, Lawrence, Lowell, and Lynn.
In western and central Massachusetts, the problem was also acute. More than a dozen communities -- from Fitchburg and Athol not far from New Hampshire to Springfield near the Connecticut border -- had at least 40 foreclosures per 10,000. The highest, Middlefield, had one foreclosure among 549 residents.
Foreclosures filings can be "more significant" in these towns, Shapiro said, because "everyone knows everyone."
During the accelerating housing market, many people were desperate to buy a house, and credit was easy, though many could not afford the mortgages, once the adjustable rates began to increase, housing specialists and counselors said.
In central and western Massachusetts, where house prices historically were low but took off during the boom, property flipping and investment scams compounded problems.
Barry Bluestone, dean of the School of Social Science, Urban Affairs and Public Policy at Northeastern University, said there was a clear pattern in the foreclosure data: Cities with big minority populations or residents of modest means had more of them.
In Massachusetts, less than one-half percent of all mortgages were in foreclosure in June 2005, compared with 1 percent nationwide, said the Massachusetts Bankers Association. But by June 2006, Massachusetts' rate increased, to 0.63 percent, while the nation's was the same.
Michael Fratantoni, the chief economist for the Mortgage Bankers Association of America, in Washington, D.C., predicted they would "level off," if the United States and Massachusetts economies continue growing at a good clip in 2007.
Kimberly Blanton can be reached at blanton@globe.com.
? Copyright 2006 Globe Newspaper Company.
http://www.boston.com/business/articles/2006/11/15/foreclosure_filings_surging_in_state/