The housing crisis of a few years ago is in the rearview mirror, but its aftershocks continue to plague many Greater Boston residents still dealing with foreclosures.
Foreclosure orders in the state in the first five months of 2015 increased by nearly 60 percent compared with the same period last year, according to a recent report from a Boston-based real estate tracking company, the Warren Group.
In that same period, the number of foreclosures statewide increased by 18 percent compared with 2014. In the month of May alone, foreclosures were 82 percent higher than they were in May of last year.
This marks the first time since 2012 that foreclosures trended upward in the first five months of the year, the data show.
The bulk of these notices and deeds aren’t new, said Tim Warren , chief executive officer of the Warren Group. The numbers reflect a backlog of years-old delinquent loans that lenders are finally getting to for various reasons, such as “legal uncertainty, regulatory pressure to go slower, and some instances where lenders just didn’t want to own those homes; in other words they were happier to let the people stay in those homes than taking them,” Warren said. “I’m of the firm opinion that we’re not in another foreclosure crisis.”
Among Greater Boston communities, the highest numbers of foreclosure petitions, which mark the start of the process, were recorded in cities and towns north and south of Boston. Brockton tops the list at 147 foreclosure notices from January through May. Lowell comes in a distant second in the region with a total of 89 petitions. The cities also claim the top two spots for actual foreclosures through May.
West of Boston, Marlborough had the highest number of foreclosure petitions through May with 27, followed closely by Framingham, Milford, and Shrewsbury. Framingham recorded the highest number of actual foreclosures west of Boston with 12 over the first five months, followed by Bellingham and Milford with nine and eight, respectively.
Although foreclosures in Plymouth County, which includes Brockton, are up nearly 50 percent through May compared with the first five months of last year, Register of Deeds John R. Buckley said the numbers are nowhere near where they were six years ago. However, he added, just as it was at the height of the crisis, economically challenged urban communities are the ones getting hit hardest once again.
“Brockton is probably not unique. Other communities like Leominster, Lowell, Fitchburg, those communities that still have a higher-than-average foreclosure situation, it’s not a story that continues to be followed even though some people are still in trouble,” Buckley said. “If you compare it with what it was a few years ago, it’s definitely not as bad. But if you compare it to 15 years ago, it would be high; it’s a tremendous problem.”
Another reason lenders may be moving ahead with foreclosures more aggressively than in the past couple of years is the current high demand and low supply in the real estate market, said M. Paul Iannuccillo, the Northern Essex register of deeds, whose district includes Lawrence and Andover.
“They can sell properties now higher than they could before because there’s not a lot of inventory,” Iannuccillo said. “The market is pretty hot.”
In Lawrence, third behind Lowell and Lynn for number of foreclosure orders north of Boston, three-family homes are selling at a record pace, he said. On average, residential properties in the area take about 16 days from the point they are put on the market to when they are under agreement, Iannuccillo said.
Many homeowners under foreclosure orders during the crisis took advantage of state and community counseling and financial resources that helped them work with lenders to remain in their homes, but the current foreclosure numbers indicate it could be the end of the line for those who simply couldn’t make ends meet, said William P. O’Donnell, register of deeds for Norfolk County, which encompasses communities south and west of Boston.
“The banks are saying ‘We’re going to finally foreclose on the property,’ ” O’Donnell said. “This foreclosure issue hits people across the board. It doesn’t matter if they live in a wealthy town or not a wealthy town; it’s sickness, or people lose their jobs.”
In Worcester County, which includes Milford and Shrewsbury, foreclosure petitions are up 76 percent through May over last year, higher than the statewide percentage. David Gasser, director of the nonprofit NeighborWorks HomeOwnership Center of Central Massachusetts, links the higher number to people who lost their jobs during the recession and haven’t been able to catch up.
For the most part, they fall into two camps, he said: those in their 50s and 60s who can’t find new employment at their former pay level, but are not ready for retirement; and those who are underemployed with fewer hours and less pay.
“It’s less about the job losses and more about the quality of jobs and types of employments available for people,” Gasser said. “We’re still seeing people coming to our offices two, three years behind, and some even five years behind” on their mortgage. “Eventually, you can’t hide forever.”
Those going through the foreclosure process now should take advantage of the many community and state programs put in place in response to the mortgage crisis, Gasser said. And those who won’t be able to keep their homes should consider a so-called short sale, putting their property on the market for less than the amount of their mortgage’s balance. Although not financially advantageous, he said, it is better than a foreclosure.
“Given the size of the impact of the financial crisis, it’s going to take a long time for these to clear out of the system,” he said. “We’re hoping for some normalcy. This may be one more ripple in that pond.”