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Foreclosure petitions rise in July

Lenders speed efforts to seize Mass. properties; but proceedings are down 38% over 2010

By Jenifer B. McKim
Globe Staff / September 1, 2011

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More than 1,400 Massachusetts homeowners went into foreclosure in July as lenders began to speed up their efforts to seize properties, according to data released yesterday.

Warren Group, a Boston company that tracks local real estate, reported that 1,441 homeowners received foreclosure petitions in July, the first step in the process of taking back a property. It was the highest monthly number so far this year and the second consecutive month of increases, Warren Group said.

While July’s foreclosure petitions were up, they still represented a 38 percent drop from the 2,307 filed last July. This year, 6,856 homeowners went into foreclosure, a 56 percent decrease from the same time last year, according to Warren Group.

“The foreclosure process is showing signs of acceleration,’’ said Cory S. Hopkins, managing editor of Banker & Tradesman, published by Warren Group. “Homeowners are still struggling. A weakened housing market and poor economy does not bode well for consumer confidence.’’

Last year, lenders nationwide slowed foreclosure proceedings following widespread concerns about sloppy and fraudulent legal practices. State and federal regulators began investigations into lenders’ practices, prompting negotiations with banks, some of which are ongoing.

While lenders began to initiate more foreclosures, the number of completed property seizures dropped in July to 775, a 38 percent decrease compared with the same time last year, according to Warren Group. Through July, there have been 4,530 foreclosures in Massachusetts, a 48 percent drop compared with the same period in 2010.

Paul S. Willen, senior economist with the Federal Reserve Bank of Boston, said he doesn’t believe the decrease in completed foreclosures means more people are saving their homes. Instead, he said, the process is simply taking longer, mired in legal challenges and state regulations meant to protect homeowners and encourage banks to engage in negotiations to modify loans. According to a recent report by Lending Processing Services Inc., a mortgage services company based in Florida, the average US homeowner in foreclosure had not made a mortgage payment for a record 599 days.

“It’s a long and arduous process, it is getting longer and more arduous,’’ Willen said of the foreclosure process. “It is just taking too long.’’

Others believe that delays do help push lenders to negotiate with delinquent owners. Isaac Simon Hodes, a community organizer with the advocacy group Lynn United for Change, said more people are having trouble paying their mortgages because of unemployment and pay cuts rather than the predatory lending that ignited the foreclosure crisis several years ago. Today, he said, an increasing number of people are standing their ground against lenders - and some are winning back their houses.

“The resistance is growing,’’ he said. “More people are starting to refuse to leave.’’

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