Report: Foreclosure crisis hits three-decker owners
The foreclosure crisis in Massachusetts is hitting two- and three-family homes at a more devastating rate than single-family homes and condominiums, the Warren Group said today.
Three-family dwellings, sometimes known as three-deckers, have iconic status in Massachusetts and over the years, they have served as affordable housing for many a working-class and immigrant family. (At right, a three-decker in Worcester that was foreclosed late last year.)
A Boston real estate data firm that publishes Banker & Tradesman, the Warren Group said it can't give a precise explanation for this phenomenon but suspects that one reason may be that many two-and three-family homes are owned by absentee investors who are "quicker to walk away when the going gets tough."
In a statement, Warren Group chief executive Timothy Warren Jr. (left) noted a second possible explanation for the troubles in the multifamily home market: "Maybe it's that many owners of small multifamilies are very dependent on rents and are more likely to default if they can't fill their apartments every month."
Petitions to foreclose are the first step in the foreclosure process; for all property types in Massachusetts, there were 2,835 such petitions in February, up 27 percent from the same month in 2007, the Warren Group said.
Of those petitions, 635, or 23 percent of the total, were filed against owners of multifamily homes even though two-and and three-family homes represent only 11 percent of the Massachusetts housing stock, the Warren Group said; in February 2008, there were 1.8 petitions to foreclose filed against two-and three-family homes for every sale transaction for that property type.
Petitions to foreclose for all property types fell 11.7 percent from the 3,212 that were filed in January 2008, the group said.
In February, foreclosure deeds, which denotes the final step in the foreclosure process, rose 145.7 percent from 350 a year ago to 860, and up 7.5 percent from the 800 foreclosure deeds recorded in January 2008, the Warren Group said.
(By Chris Reidy, Globe staff)
