Foreclosures still falling in Mass.
But more facing start of process
The number of Massachusetts residents losing their homes to foreclosure continues to fall this year compared with 2008, according to data released yesterday.
Foreclosures between January and September dropped nearly 29.5 percent to 6,778, compared with the same period last year, according to Warren Group, a Boston company that tracks Massachusetts real estate data. Foreclosure deeds in the third quarter also fell 29.4 percent to 2,048 compared with July through September last year.
The drop in deeds - the final step in the foreclosure process - is attributed to several factors, including government pressure on lenders to help troubled homeowners by rewriting loans and legal complications that are prolonging the process.
Timothy M. Warren, chief executive of Warren Group, said one reason for the slowdown is a Massachusetts Land Court decision earlier this year that invalidated two Springfield foreclosures because the lenders did not have proof of ownership at the time of the foreclosures. Since then, many banks have slowed their foreclosure proceedings to gain more time to assemble the necessary documentation. Last week, the judge in the Springfield case reaffirmed his decision.
Paul Willen, senior economist for the Federal Reserve Bank of Boston, said foreclosure deeds also are falling because many of the most vulnerable homeowners - those who took out subprime loans in 2005 and 2006 - already have lost their properties. Still, he said foreclosure deeds will likely remain steady for the next few years as people struggle with unemployment and homes worth less than the balance on their mortgage loans.
“Even if the economy improves dramatically, we will still have serious problems,’’ said Willen. “But I don’t anticipate foreclosures going up much more.’’
But while foreclosure deeds fell, petitions - the first step in the process - increased by 28.9 percent to 21,635 between January and September compared with the same months last year, according to Warren Group.
Virginia Pratt, a foreclosure prevention counselor from the nonprofit Ecumenical Social Action Committee in Jamaica Plain, said lenders seem to be slightly more willing to renegotiate problem loans. At the same time, however, she is receiving an increasing number of calls from distressed homeowners in more expensive areas - like Newton and Wellesley - who can’t pay their mortgages because they have lost their jobs.
“We are starting to see some of these issues where unemployment is really having an impact,’’ Pratt said.
Jenifer McKim can be reached at jmckim@globe.com. 
