Mass. foreclosure auctions quadruple in April

As the housing market in Massachusetts continued to weaken, foreclosure auctions rose 355 percent in April to the highest level in years, according to The Warren Group. The Boston real estate and research firm said 1,172 such auctions were advertised in the Bay State last month, compared with 376 in April 2006.

“More homes seem to be reaching the auction block as the housing market continued to weaken in the first quarter of this year,” said Timothy Warren Jr., CEO of The Warren Group. “Fewer people are able to sell their homes after dropping behind on mortgage payments, and the process continues until houses are very close to auction.”

The number of petitions to foreclose rose 73 percent over April 2006 numbers, with 2,005 petitions filed in Massachusetts Land Court last month compared with the year-ago 1,156.

Petitions are the first step in the foreclosure process but do not always end in actual foreclosure, the report noted. Announcements are placed in newspapers to advertise a scheduled auction but are not a final count of actual foreclosure auctions, and some homeowners are able to sell their homes or refinance before the auction occurs.

- Advertisement -

“Gov. Deval Patrick’s program that allows homeowners to seek help from the Division of Banks may help some of the people in these difficult situations find solutions,” Timothy Warren said. “But we will see mortgage companies tightening their standards as far as who will be granted loans, which will mean fewer people will qualify to buy homes.”

In 2006, petitions to foreclose in Mass. rose 70 percent to 18,926, compared to 11,155 in 2005, and 46 percent more homes were advertised to be auctioned at 6,729, compared with 4,620 in 2005, the Warren Group reported.

Warren cited declining home values as part of the problem and said too many foreclosures could aggravate that further.

“The median sale price for a single-family home declined by nearly 6 percent last year. As housing prices decline, people who had borrowed 90, 95 or even 100 percent of the value of their homes now find themselves owing more than their homes are worth,” Warren said. “If those people have trouble making their mortgage payments and can’t sell the home for a price higher than the outstanding loan balance, then foreclosure is a real possibility. It can also affect the overall housing market. If a significant number of homeowners are being threatened with foreclosure and put their homes on the market for quick sale at distressed prices, the recovery from the current market slump could take longer than currently anticipated.”

The Warren Group Inc. is a provider of New England real estate data and the publisher of Banker & Tradesman and other journals. Additional information is available at www.thewarrengroup.com.

No posts to display