Massachusetts Foreclosed Homes

Massachusetts Foreclosure Deeds Double

Massachusetts home foreclosure deeds more than doubled in May 2008, the Boston Herald reported June 30, 2008; however, a new state law has yielded a temporary decline in foreclosure petitions, the first step in the foreclosure process.

The Warren Group, a publisher of real estate data, reported that foreclosure deeds, the final step in a foreclosure, rose to 1,405 in May 2008. That’s up from 677 in May 2007

Foreclosure petitions fell nearly 88 percent compared with May 2007, to 390, but the decline is believed to be temporary because of a foreclosure-prevention law recently approved by state lawmakers. The law creates a 90-day cooling off period before foreclosure proceedings can start in court. Previously, those proceedings could begin within 30 days after a borrower went into default.

Read The Boston Herald Article

Coakley Scores A+ For Foreclosure Crisis Response

Massachusetts Attorney General Martha Coakley has been recognized by the Association of Community Organizations for Reform Now (ACORN) for her office’s work in responding to the foreclosure crisis.

The group gave the Commonwealth's AG an A+ grade. Of the 51 attorneys general analyzed, only five received an A+ grade.

Connecticut's attorney general, Richard Blumenthal, also received an A+ grade. Rhode Island's AG, Patrick Lynch received a C- while New Hampshire's Kelly Ayotte had an "incomplete" grade. Maine's Steve Rowe received a F grade, and Vermont's AG, William Sorrell, also landed a F grade.

Read The Entire ACORN Report

State Negotiates The Return Of Homes

The Massachusetts Attorney General's office has negotiated the return of 26 homes to homeowners that the state said were tricked out of their homes in an alleged foreclosure scam, The Boston Globe reported June 19, 2008.

The homeowners were allegedly persuaded out of their homes by a Brockton lawyer. The lawyer has now filed for bankruptcy.

"The attorney general's office accused [Alec G.] Sohmer of persuading the homeowners to transfer the titles to their properties to him as part of an effort to avoid foreclosure. Sohmer then charged the former owners rent and sometimes sought to evict them when they could not keep up with the payments - which Sohmer knew they could not afford, the state said. The former owners hoped to regain title to their homes through refinancing."

The state alleged that Sohmer had taken out the loans to pay off the homeowners' original mortgages, borrowing extra money in order to take fees and equity from the new loan proceeds in each instance. Attorney General Martha Coakley sued Sohmer for "unfair and deceptive" business practices in October 2006.

The legal settlement included the lenders, which provided the loans to facilitate the alleged scam, and  those lenders will reduce the value of each mortgage to the balance that existed before Sohmer took ownership of the house, or to 80 percent of the home's current market value, whichever is lower.

"The agreement will result in a $1.8 million reduction in total mortgage obligations for all of the homeowners, reducing their monthly payments in many instances to help ensure they do not fall back into foreclosure."

Read The Boston Globe Article

Attorney General's Press Release

Artificial Decline In Massachusetts Foreclosures?

Massachusetts had only 390 foreclosure filings in May; however, real estate professionals attribute the pullback to a law enacted May 1, 2008 that gives delinquent homeowners three months to pay up before foreclosures can occur, the Boston Herald reported June 10, 2008.

"That’s an 88 percent drop from April’s 3,327 filings, as well as the first time since January 2006 that lenders launched fewer than 1,000 foreclosures a month."

Those in the real estate industry suspect lenders simply delayed most May foreclosure filings three months until August.

"The new measure also grants homeowners one last chance to pay past-due amounts without owing the hefty collection fees that lenders often tack on to late accounts."

Read The Boston Herald Article

Nation's Foreclosure Filings Continue Rise

Foreclosure filings around the nation continued to rise in May, the Boston Herald reported June 13, 2008.

"Nationwide, 261,255 homes received at least one foreclosure-related filing in May, up 48 percent from 176,137 in the same month last year and up 7 percent from April, foreclosure listing service RealtyTrac Inc. said today."

One in every 483 U.S. households received a foreclosure filing in May, the highest number since RealtyTrac started keeping track 2005 and the second-straight monthly record.

Foreclosure filings increased in all but 10 states. Nevada, California, Arizona, Florida and Michigan had the highest statewide foreclosure rates in May.

Read The Boston Herald Article

Massachusetts AG Sues H&R Block

Massachusetts Attorney General Martha Coakley sued H&R Block last week, claiming the company's mortgage unit discriminated against black and Latino borrowers and caused an escalation in housing foreclosures in the Commonwealth, Reuters reported June 3, 2008.

The lawsuit is the first by a U.S. state to accuse a subprime-mortgage lender of civil rights violations following the recent, nationwide wave of foreclosures of homes in poor, often minority, neighborhoods.

The suit, filed in Suffolk Superior Court, accuses H&R Block's subprime-lending subsidiary, Option One Mortgage Corp, of engaging "in unfair and deceptive conduct on a broad scale."

I did a short sale in Revere on a 3,000-plus square-foot home across from the sea wall where Option One was the lender. It was owed about $550,000, but ultimately allowed the sellers to accept a $380,000 offer.

"H&R Block is refocusing on tax preparation after incurring about $1 billion of losses at Option One, which made home loans to people with poor credit. It no longer offers mortgages."

Too bad it took $1 billion in losses and the negative impact of foreclosures on communities to figure out that lending money isn't the same as tax preparation. Of course, the borrowers were more than willing to take money they likely knew they couldn't afford to pay back.

Read The Reuters Article

U.S. Home Foreclosures Set Record In Q1

A new report states that home foreclosures and the number of late payments in the United States both set records in the first quarter, Boston.com reported June 5, 2008

Both the pace of new foreclosures and late payments were the highest since 1979.

"The latest snapshot of the mortgage market ... showed that the proportion of mortgages that fell into foreclosure soared to 0.99 percent in the January-through-March period. That surpassed the previous high of 0.83 percent over the last three months in 2007."

The data comes from the Mortgage Bankers Association.

The number of homeowners that fell behind on home-loan payments jumped to 6.35 percent in the first quarter, compared with 5.82 percent for the previous three months. Payments are considered delinquent if they are 30 or more days past due.

California, Florida, Nevada and Arizona alone accounted for 89 percent of the increase in new home foreclosures.

Read The Boston.com Article

Couple Wins Auction, But Can't Buy House

Buying a home at a multi-property auction has been difficult, if not impossible, in Massachusetts.

Another winning bidder, Alexandria MacKinnon, on an allegedly foreclosed Massachusetts home auctioned by Real Estate Disposition Corp. has found she can't close on the home because the foreclosure process is not yet complete, The Boston Globe reported May 14, 2008.

 

After a March auction, Real Estate Disposition Corp. told MacKinnon and her husband to prepare for a closing by May 8, 2008, so the couple gave notice to their landlord and qualified for a mortgage loan. Then the closing was postponed indefinitely because the mortgage company that was working for the buyers told them it couldn't make the loan because the seller did not yet own the home.

"Real Estate Disposition was warned by state regulators before the March auction against including any properties it did not have the right to sell. The company has said it auctioned several such properties at a previous event in November."

Buyers are faced with a great deal of frustration when dealing with banks and the companies that represent them. Buyers also make the mistake of attempting to complete the process without professional representation.

Read The Boston Globe Article

Another Copper Thieves Story

The media can't get enough of the stories about thieves stealing copper from foreclosed homes or otherwise abandoned property.

A May 14, 2008 article in The Boston Globe talks about an "epidemic" of thefts.

"Scrap copper, which sold for about 75 cents a pound a decade ago, now sells for more than $3 a pound. Demand from countries with rapidly growing economies, such as China, has pushed up the price."

Shouldn't the stories be about what kind of loser breaks into a home, tears out walls and cuts out copper pipe for $3 a pound?

Read The Boston Globe Article

Massachusetts Foreclosures Continue Record Pace

The first quarter of 2008 saw the number of Massachusetts home owners enter the foreclosure process at a record pace, the Boston Business Journal reported May 7, 2008.

"The state saw 9,114 new properties enter foreclosures, up almost 38 percent over a year ago and the third record-breaking quarter in a row, according to data provider ForeclosureMass.com."

More than 75 percent of the state's 351 communities saw foreclosure rates increase in the past year, with 73 municipalities seeing at least a 75 percent increase in filings.

Read The Boston Business Journal Article

MA Law Extends Foreclosure Notification Period

A Massachusetts law that extends the foreclosure notification period to 90 days went into effect on the first of the month, the Boston Herald reported May 1, 2008.

The law requires lenders give borrowers 90 days after a notice of delinquency to resolve their debt. The previous law required only 30 days notice.

"Gov. Deval Patrick says the new rules are aimed at avoiding unnecessary foreclosures and allowing more people to stay in their homes. He’s asking lenders to use the 90-day period to restructure as many loans as possible."

As of July 1, the law will also require the licensing of all mortgage loan originators (aka, mortgage brokers).

Read The Boston Herald Article

Trashed Bank-owned Properties

The headline is a little misleading. It suggests that there are some bank-owned properties that aren't trashed. Well, there are, but not many.

The Boston Herald reported April 28, 2008 that many ex-owners of foreclosed properties take lighting fixtures and trash homes on their way out the door.

It's absolutely true, and it happens more often than not. It's to the point where I am amazed to see a bank-owned property that isn't in really crappy shape (Herald Photo).

"People rip up walls, kick in doors or take bathroom fixtures or copper wiring - sometimes to sell, other times just to get back at lenders."

Here's a tip: Don't open any refrigerators left behind.

"Figures on vandalized foreclosures are hard to come by, because owners can legally do what they want with homes until lenders seize property titles. Crooks also sometimes hit homes after former occupants have moved out."

When I hear about investor wannabes buying foreclosed property at auctions without seeing the inside I cringe.

“'You drive up and say, ‘Wow, what a nice house!’ ' the broker said. 'Then you look inside and say: ‘My God, what happened here?’ Short of taking the shell of the house, everything is gone.'”

Read The Boston Herald Article

1,200 MA Homes Seized In March

Nearly 1,200 homes in Massachusetts were seized last month by lenders, up about 140 percent from March 2007, The Boston Globe reported April 25, 2008.

The data comes from The Warren Group, a publisher of real estate data.

"Foreclosures during the first three months of the year topped 2,800, also up about 140 percent over the same period last year. Massachusetts is on pace to shatter the previous record for the most foreclosures in a year, set in 1992."

The foreclosures are most common in urban areas and with multi-family properties.

"In Lawrence, at the current pace, 4 percent of the city's residential properties will be seized by lenders this year."

Although many of the multi-family foreclosed properties remain on the market many months, investors appear to be buying single-family foreclosures much more quickly. In fact, my experience has been that many bank-owned, single-family properties receive multiple offers.

Many people believe the foreclosure crisis will worsen before it improves.

"There are indications that worse is yet to come: The number of petitions to foreclose, an indicator of future foreclosures, climbed by 33 percent to 2,918 in March, compared with 2,189 filed in March 2007."

What many potential home buyers don't realize (or simply don't want to believe) is that the foreclosure situation is different from community to community. Not every city or town has been affected by foreclosures.

"The problem continues to plague some communities more than others. Ninety-five Massachusetts cities and towns have yet to record a foreclosure this year. Brookline is the largest town on that list, followed by Lexington. By contrast, the cities hit hardest, including Lawrence and Brockton, are amassing foreclosures twice as fast as last year."

Based on its population, Boston hasn't had that many foreclosures. Dorchester has had more than the rest of the city combined.

Read The Boston Globe Article

U.S. Senate Bill Would Bring $211 Million To MA

A housing relief bill being considered in the United States Senate would provide Massachusetts with $211 million to boost home ownership and help homeowners avoid foreclosure, the Boston Herald reported April 3, 2008.

"The money is part of a $10 billion mortgage revenue bond program for state and local housing agencies that Sens. John Kerry, D-Mass., and Gordon Smith, R-Ore., pushed to include in the bill."

Kerry, who is running for re-election in November, said the Federal Reserve recently moved quickly to assist investment bank Bear Stearns as it stood on the brink of bankruptcy. He said the same urgency was needed to help families struggling with the foreclosure crisis.

"The new bond program could mean 1,110 new and refinanced home loans in Massachusetts, and up to 80,000 new loans nationwide, Kerry said."

Read The Boston Herald Article

About 170 Homes For Sale At Boston Auction

About 170 foreclosed Massachusetts properties were up for sale at an Auction at the Hynes Convention Center March 29, 2008, the Boston Herald reported.

Real Estate Disposition Corp, an Irvine, Calif.-based company, held the auction, but is under investigation by state officials for allegedly selling some houses at a November 2007 auction before the foreclosure process was completed, according to the Boston Herald.

I'd be a little nervous when the people working the auction are wearing tuxedos (Herald photo). After all, these are properties with leaky roofs, filthy carpets and wet basements.

Read The Boston Herald Article