New foreclosure activity soared in Mass. in April
Hundreds more Massachusetts homeowners fell into foreclosure last month as lenders moved to close out delinquent loans, according to a report released Tuesday by Warren Group, a Boston company that tracks local real estate.
The number of petitions — the first step in the foreclosure process — rose to 1,750 in April, a 47 percent increase from the same month in 2011, and the highest level in nearly two years, Warren Group said. Since January, 6,098 petitions have been filed statewide, a 64 percent increase compared with the first four months of last year. Foreclosure deeds — the last step in the home seizure process — also rose last month to 714, 19 percent more than April 2011. Between January and April, 2,968 homeowners lost their properties to foreclosure, a 30.5 percent increase compared with the same period in 2011, Warren Group said.
Some housing activists said the increasing number of home takings is a sign that lenders are still not doing enough to help homeowners in crisis, which will hurt the economy as a whole. But few economists or housing specialists fear the jump in foreclosures is a sign that the state housing market or economy is worsening.
Cory S. Hopkins, editorial director of Warren Group, said the increase in foreclosures looks particularly dramatic because the numbers were low last year. In 2011, lenders slowed down foreclosure activity to examine procedures following national concerns about shoddy and fraudulent practices by major lenders.
“It’s necessary for a wave of foreclosures to work through the system this year, but it shouldn’t cause panic,’’ Hopkins said. “To return to a healthier market, the backlog of distressed properties needs to be cleared from banks’ books.” Indeed, other reports appear to show the housing market is improving. Boston-area home values rose 0.7 percent in March compared with February, according to seasonally adjusted data released Tuesday by the S&P/Case-Shiller home price indices.
The median price for a single-family home also rose slightly in April, according to Warren Group, following four months of improving sales.
“There are many indications that the housing market has hit its bottom,’’ said Alan Clayton-Matthews, a Northeastern University economist. “There’s a lot of reasons to believe that things are on the mend.” Paul Willen, senior economist for the Federal Reserve Bank of Boston, said foreclosures will continue even as home prices start to rise. That’s because many homeowners who bought at the peak of the market have suffered steep drops in property values. And homeowners facing foreclosure haven’t paid their mortgages in months, if not years.
“The tragedy is the fact that households got into trouble in the first place,’’ Willen said. “The foreclosure deed is a good thing in the sense that it is some kind of closure.”
Still, housing advocates say lenders are still taking back homes from people who could pay their mortgages if they were offered a loan modification or principal reduction.
“Tons of homeowners can afford their properties,’’ said Melonie Griffiths, a lead organizer with the Jamaica Plain nonprofit City Live/Vida Urbana. “The banks are still going ahead with the auctions.”
Jenifer B. McKim can be reached at firstname.lastname@example.org. Follow her on twitter @jbmckim.