With the collapse of the housing and financial markets leading to the most-recent recession, Massachusetts homeowners found themselves facing a real estate market filled with mortgages that could no longer be easily modified and underwater house values. This combination led to a significant rise in the number of foreclosures. With economic recovery comes a reversal of the rising foreclosure trend, resulting in a significant drop in the number of foreclosures statewide.
The October 2012 foreclosure numbers have been released, with only 371 foreclosures recorded for the entire state, down 53 percent from the number recorded one year prior. This number also ranked as the lowest monthly rate in nearly six years. The lowered rate is part of a continual trend, with the number of foreclosures from January to October of this year running 2.5 percent lower than the same period in 2011. The drop indicates that the economy is gradually improving.
Not all the news was rosy, however. The number of foreclosure initiations in October increased 22 percent compared to last year, up 44.5 percent for the first 10 months of the year. This raise in the rate is artificially high, though, because lenders were operating at slower speeds in 2011 due to increased attention given to the foreclosure process because of fraudulent activities in the mortgage industry.
Short sales are one option available to a homeowner facing foreclosure. Homeowners can also choose to declare bankruptcy to save a home, or attempt to modify an existing mortgage to receive new terms that will lower the monthly payments. For Massachusetts residents, new state regulations may also aid in homeowners keeping their homes, from laws that force lenders to renegotiate mortgages to those that prevent lenders from initiating a foreclosure when a homeowner has already begun the mortgage modification process.
Source: The Boston Globe, “Monthly foreclosures in Massachusetts at 6-year low,” Jennifer B. McKim, Dec. 4, 2012