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Home loss surging in Mass.

Rate of foreclosure jumps as lenders get used to process

By Jenifer B. McKim
Globe Staff / May 19, 2010

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More Massachusetts homeowners received foreclosure notices or lost their homes in April than they did during the same month last year, more evidence that the state’s foreclosure crisis is not near its end.

The number of homeowners who lost their properties to foreclosure in April swelled to 1,372, almost 80 percent more than during the same month last year, according to data released yesterday by Warren Group, a Boston company that tracks local real estate.

The number of foreclosure petitions — the first step in the process of a lender taking back a property — jumped to 2,431 in April, a 20.8 percent increase over April 2009, Warren Group said.

Indeed, the first four months of 2010 found more homeowners in deep financial trouble than last year. Petitions through April increased to 9,008, 4.2 percent higher than in 2009. Foreclosure deeds, filed when a homeowner officially loses title to a property, were up 36.6 percent during the first four months of the year compared with the same period last year, according to Warren Group.

The data did not surprise housing advocates, who say they are seeing more homeowners struggling to pay mortgages because they have been out of work or have fallen victim to predatory lending practices. And despite the urging of everyone from individual homeowners to President Obama, they add, lenders are still not doing enough to help solve the problem.

Paul Collier, a Cambridge lawyer who works with clients fighting foreclosure, said federal efforts to push lenders to help distressed homeown ers are voluntary and have been largely unsuccessful.

“You are really seeing the steady building of this foreclosure stuff and the failure of anybody in the public sector to do any intervention,’’ said Collier. “It just keeps getting worse and worse.’’

Many Massachusetts homeowners are “underwater,’’ meaning they owe more than their properties are worth, said Lisa Vinikoor, lead organizer for the nonprofit Merrimack Valley Project, which fights for social justice. She said some homeowners already are in foreclosure, while others are negotiating with their lenders and having no success. For those on the financial edge, the temptation to stop making payments on an underwater property can be strong.

“The banks are unwilling to negotiate a fair mortgage,’’ Vinikoor said.

As more borrowers find themselves in trouble, lenders are shortening the time it takes to take back their homes for nonpayment, according to a new analysis by Banker & Tradesman, a Warren Group publication. The process is now being completed in about 4.6 months, compared with nearly 8 months during the early part of 2008, according to Banker & Tradesman.

Vincent Valvo, group publisher of Warren Group, said the surge in April deeds was partly because lenders have become more comfortable navigating the maze of foreclosure-related government regulations and programs. Many have also ended voluntary moratoriums on foreclosures, he said.

“They are moving forward,’’ Valvo said.

Jenifer B. McKim can be reached at jmckim@globe.com.