Foreclosures in Mass. plummet 58.6% in May
Foreclosures in Massachusetts took a steep dive in May, the second consecutive month they have fallen, according to data released yesterday by Boston real estate tracking firm Warren Group.
There were 582 foreclosure deeds recorded in May, a 58.6 percent decrease from 1,405 during the same month in 2008, and a 24.3 percent drop from April.
So far this year, the number of foreclosure deeds statewide has gone down 26.3 percent to 4,110, compared with 5,576 during the same period last year, Warren Group said.
Timothy M. Warren Jr., Warren Group’s chief executive, called the new data “encouraging.’’ Foreclosure deeds in May were at the lowest level since April 2007, he said.
“I think lenders have realized how costly foreclosures can be and are taking steps to avoid foreclosure whenever possible,’’ Warren said. “But I remain concerned because unemployment has crept up and many people who’ve lost their jobs will have trouble keeping up with mortgage payments.’’
Others attribute the drop to a decision in Massachusetts Land Court in late March that invalidated two foreclosures because the lenders failed to show proof they held titles to the properties. The decision has prompted concern throughout the industry and is stalling sales of foreclosed properties, real estate specialists say.
“It’s put everything on hold,’’ said Kristen Casucci, a real estate agent with Quaboag Valley Real Estate in Brookfield, who said she has seen several foreclosure sales in her office fall through because of the legal decision.
Paul Collier, director of litigation at the WilmerHale Legal Services Center, Harvard Law School’s clinical teaching facility in Jamaica Plain that serves many low-income clients, said title companies are balking at insuring titles in foreclosure sales because of the ongoing litigation.
“Lenders can’t provide title to purchases, which means purchasers can’t get financing,’’ Collier said. “Even lenders that want to hold foreclosure sales can’t get buyers at those sales.’’
Despite the drop in foreclosure deeds, petitions - the first step in the process - are up dramatically. There were 2,329 foreclosure petitions filed in May, almost six times the 390 petitions filed during the same month last year. Warren attributed the sharp increase to the so-called right-to-cure law that went into effect last May. The law required lenders to give borrowers 90 days to catch up on missed mortgage payments, causing the number of foreclosure petitions to temporarily plummet.
Nicolas Retsinas, director of Harvard University’s Joint Center for Housing Studies, agreed that whatever the reason for the drop in foreclosures, the crisis is not over. The economy is still struggling, Retsinas said, which affects homeowners’ ability to pay their mortgages. “I don’t think it is the end of the foreclosure problem,’’ he said.
Jenifer McKim can be reached at firstname.lastname@example.org.