Foreclosure Activity Surges in Mass.

State could surpass previously held record

State could surpass previously held record

RISMEDIA, December 14, 2006-(MCT)-Massachusetts experienced the second-biggest increase in foreclosure activity in the country last month, according to a recent report from a firm that tracks the housing market.

The Bay State came in second only to Alabama in the rise in total properties that entered some stage of foreclosure, including lenders' initial notices that homeowners were in default, foreclosed property sales and auctions, and lenders' sales of repossessed property, said RealtyTrac, an Irvine, California, company that researches and provides information about US properties for sale.

In November, 2,100 Massachusetts properties were in or facing foreclosure, up 299% from 526 in November 2005, the firm said. Alabama's increased 466% during the same period.

By the end of the year, Massachusetts could surpass its 1991 record for the number of initial foreclosure notices by lenders against homeowners, according to a separate report yesterday by ForeclosuresMass.com, which culls the data from filings in state Land Court. There were 15,133 filings statewide between January and October, compared with 17,000 in all of 1991.

"Some of the states that had the biggest booms over the past few years are now experiencing the highest number of new foreclosure filings," including Massachusetts, said Rick Sharga, RealtyTrac's vice president of marketing.

However, Sharga said that because the housing market has not collapsed and mortgage rates remain low, only about one in five properties is currently repossessed by a bank or mortgage company. In most cases, the homeowner is able to sell the house or work out a refinancing plan with the lender.

RealtyTrac's November data confirms its second-quarter findings, when there were 4,270 Massachusetts properties in various stages of foreclosure, up 481% from the second quarter of 2005. That was the second highest after Rhode Island's increase.

Jeremy Shapiro, president of ForeclosuresMass , blamed the foreclosure crisis on exotic loan products that often offer low introductory rates and low monthly payments, which later rise as the rate adjusts upward.

Massachusetts now has among the highest house prices in the country, which lenders and housing experts say put pressure on buyers to finance their homes with adjustable rate mortgages rather than the traditional 30-year, fixed-rate mortgage.

"When you have homeowners who have a home they were able to pay for but aren't going to be able to pay for" when payments go up, Shapiro said, "that leaves them with very few options. One is foreclosure."

ForeclosuresMass tracks only filings, because it is extremely difficult to collect accurate auction and other data about properties in the stages of foreclosure, he said.

Copyright 2006, The Boston Globe.

Distributed by McClatchy-Tribune Information Services.

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