Home foreclosure auctions surge, but new proceedings down

Auctions of foreclosed properties in Massachusetts surged 54 percent in April from the previous month, as record numbers of foreclosures initiated by mortgage lenders drove the number of people losing their homes to its highest level in years.

Last month, lenders scheduled auctions of 1,712 homes of owners delinquent on mortgage payments, compared with 1,111 in March, according to The Warren Group, a Boston real estate and research firm.

But the number of new filings of foreclosure proceedings, the first step in a protracted process, decreased slightly from March, Warren Group said. Lenders initiated 2,005 foreclosures against homeowners in April, compared 2,139 the prior month.

In the first four months of 2007, there were 4,830 property auctions -- three times more than the same period last year -- as the crisis in subprime mortgage loans continued to build in Massachusetts.

Regulators have blamed subprime loans, targeted to buyers with poor credit, for contributing to the record numbers of homeowners facing mortgage delinquencies in Massachusetts. Those loans often carry interest rates that rise sharply after two years, which can increase monthly payments by hundreds of dollars.

Some homeowners may be able to avert foreclosure by refinancing their loans or selling the home. However, with house prices lower than a year ago, delinquent borrowers who bought their homes recently may not be able to refinance, or sell the property for enough to cover their loan obligations.

"More homes seem to be reaching the auction block as the housing market continued to weaken in the first quarter of this year," said Timothy Warren, Warren Group's chief executive.
(By Kimberly Blanton, Globe Staff)