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The Boston Globe

Business

Drop in Mass. foreclosures signals improving market

In another sign of a brightening housing market, fewer Massachusetts homeowners went into foreclosure and lost their properties to lenders in November, according to data released Wednesday.

There were 295 completed foreclosures in November, a decline of almost 60 percent from November 2011, according to the Warren Group, a Boston company that tracks local real estate.

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Between January and November, the number of completed foreclosures fell to 7,158, a drop of nearly 8 percent compared to the first 11 months of 2011, according to the Warren Group.

Last year is also likely to have the smallest number of completed foreclosures in the state since 2006, when the housing crisis began.

“It’s been quite a positive year for the local housing market,’’ said Timothy M. Warren Jr., chief executive of the Warren Group.

“An improving employment picture combined with government-backed programs are leading to fewer mortgage delinquencies,” Warren added.

The news added to growing sentiment that the state’s housing market is on the rebound.

Sales of single-family homes increased to 43,652 during the first 11 months of the year, surpassing the number of sales for all of 2011, according to the Warren Group.

Meanwhile, home values in the Boston area are rising modestly, easing homeowners’ efforts­ to refinance or sell their properties.

Paul Willen, senior economist for the Federal Reserve Bank of Boston, said that as home values go up lenders become more willing to help struggling homeowners.

Borrowers, in turn, have more incentive to keep paying their mortgages and stay put.

“Now that things are improving and people believe they are improving, that changes everything,’’ he said. “Optimism eases up a lot of problem.”

Lenders also initiated fewer foreclosures in November.

Foreclosure starts dropped to 983, for a 3 percent decline from the same month in 2011, according to the Warren Group.

But foreclosure initiations are still likely to be higher in 2012 than in 2011, when lenders slowed procedures amidst allegations across the country of sloppy and fraudulent practices.

There were 16,317 foreclosure petitions filed during the first 11 months of 2012, a 40 percent increase compared to the same time in 2011, according to the Warren Group.

Grace Ross, coordinator of a nonprofit advocacy group, the Massachusetts Alliance Against Predatory Lending, said foreclosures declined in 2012 in part because lenders were more willing to allow troubled homeowners to unload their properties through short sales.

In a short sale, a homeowner sells the property for less that what is owed on the mortgage, and the lender agrees to accept the lower amount.

Many homeowners, however, are still falling behind on mortgage payments and facing foreclosure because of the weak economy, Ross said.

“People are still financially struggling,” she said.

Virginia Pratt, a foreclosure prevention counselor at the nonprofit Ecumenical Social Action Committee Inc. in Jamaica Plain, agreed that lenders are more amenable to helping struggling borrowers these days.

They are making loan modifications that lower monthly payments and even forgiving some debt. “Lenders are doing more workouts,’’ she said.

“There’s certainly a bulk of people who have been helped who wouldn’t have been helped,” before, she added.

Jenifer B. McKim can be reached at jmckim@globe.com. Follow her on twitter
@jbmckim.
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