Mass. foreclosures up 32% in May
The pace of foreclosure activity in Massachusetts quickened last month as lenders stepped up efforts to take back homes from long-delinquent borrowers, according to data released Thursday.
The number of foreclosure petitions, the first step in the property seizure process, rose to 1,724 in May, more than double the number during the same month last year, according to Warren Group, a Boston company that tracks local real estate.
Between January and May, lenders filed 7,822 petitions to foreclose, a 77 percent increase compared with the same period in 2011, Warren Group said.
Foreclosure deeds, the last step in the process, jumped to 755 in May, up 32 percent from the same month last year. There were 3,736 deeds filed during the first five months of 2012, an increase of 31.3 percent compared with 2011.
Massachusetts Attorney General Martha Coakley said Thursday that the surge in foreclosures offers more proof that the state should do more to help struggling homeowners.Legislators are considering a bill that would force banks to offer certain borrowers a reasonable mortgage loan modification if an analysis shows it makes more economic sense than a seizure.
“This is further evidence that the foreclosure crisis continues to impact thousands of homeowners in Massachusetts and that our economy will never fully recover until we address it,’’ Coakley said.
But Cory S. Hopkins, editorial director of Warren Group, said foreclosures were expected to increase this year, following a major settlement between the nation’s top five lenders and attorneys general across the country over allegations of sloppy and fraudulent foreclosure procedures. Last year, lenders carried out fewer foreclosures while they examined their internal procedures and awaited the outcome of the settlement talks.
Because of the slowdown, the average delinquency on a Massachusetts home loan exceeded two years before a property was seized, according to Lending Processing Services Inc., based in Florida.
“We need these distressed properties to get cleared from banks’ books,’’ Hopkins said. For buyers, he noted, “The increased activity also leads to opportunities” as more homes come on the market.
Northeastern University economist Alan Clayton-Matthews said foreclosure numbers do not reflect the health of the overall Massachusetts economy, which has been on the upswing.
Housing sales have been increasing for months, the state has added thousands of jobs, and the unemployment rate is now at 6 percent, he said. “Maybe we are seeing the crest’’ of foreclosures, he said.
Jenifer B. McKim can be reached at email@example.com. Follow her on twitter @jbmckim.