Housing foreclosures expected to rise
Ease of borrowing money, uncertain economy leave some homeowners struggling to keep up
With the rise of easy credit and the continuing tough economy, foreclosure filings in south-of-Boston communities are expected to increase by roughly a quarter this year, according to the most recent data from ForeclosuresMass, an Internet website that provides listings of property foreclosed upon in Massachusetts.
In Bristol County, where 696 home foreclosures were filed last year, the expected increase is 25.58 percent. In Plymouth County, with 966 filings in 2004, the expected rise is 23.70 percent. In Norfolk, with 701 foreclosure filings last year, the projections are for a 25.35 percent increase.
Real estate auctioneers like Quincy-based Daniel J. Flynn said he expects his number of auctions on foreclosed properties to double or triple this year.
Last year he oversaw 600 auctions. So far this year, he says, he's done more than 750. By law, when a homeowner falls substantially behind on mortgage payments, the bank or mortgage company that holds the deed may take ownership by foreclosure, and sell the property to recover its loan.
Not all foreclosure filings will lead to a home's sale, since some people come up with the money to satisfy a lender, or declare bankruptcy to restructure the debt.
Housing advocates say the anticipated rise in filings stems primarily from homeowners' job losses, whether due to illness or the economy.
Another major contributing factor is the ease with which many homeowners are getting more credit than they can repay. E-mails, TV commercials, and junk mail bombard people with offers; even those with bad credit histories are encouraged to borrow. But often these loans have less than favorable terms, say affordable housing advocates, and buyers end up overextending themselves in a market that has become particularly pricey.
''What we're seeing is people, because of the high cost of housing, getting into loans either through purchasing homes they can't afford or through refinancing, ending up doing so to the point of burying themselves," said Steve Bennett, a counselor at a foreclosure prevention program known by the acronym ESAC. The multiservice nonprofit agency is based in Jamaica Plain, but helps homeowners south of the city as well.
Amid the gloomy foreclosure predictions, there is one small bit of good news for cash-strapped homeowners: Because the region's housing market is so strong, those who do get into financial trouble have more flexibility to sell their homes for a profit before losing the home to foreclosure, notes Saber Salam, senior vice president at Eastern Bank, where foreclosures have been few.
He notes, ''Foreclosure is the last resort . . . It's not good for customers. And it's not good for the bank."
But across the region it still happens with grim regularity. It is not unusual, says Bennett, for people to walk into ESAC holding stacks of mail they are too afraid to open.
Brockton residents Beverly Yerra and her husband, Harry, narrowly avoided becoming part of the statistical uptick.
She said they would have lost their three-bedroom ranch in December to foreclosure had it not been for ESAC.
Yerra, whose 15-year-old son and 22-year-old daughter live with them, does not work outside the home. Her husband has worked only now and then since being laid off from his job as an appliance store salesman several years ago.
They fell $10,000 behind in mortgage payments, and found it hard to dig out of debt with his newest job at
They begged and borrowed money from their daughter's boyfriend. The couple cashed the savings bond their son was given at birth, promising to pay him back. Jewish Family and Children's Services also gave the couple money, she said.
''It was horrid. It was so horrible. You can't imagine," Yerra said. ''You are thinking: I'm going to be out in the street. What am I going to do? It's going to be a long, hard winter."
Virginia Pratt, a counselor at ESAC, helped the couple refinance their mortgage so that payments are $785 a month instead of $1,000, said Yerra. That made the difference. ''Without her, I know we would have lost the house."
Pratt said she is working with a Stoughton family that she says typifies the reasons many find themselves in danger.
''The husband lost his job of 12 years. He's been employed sporadically, unemployed for two years. He just got a new job. They had to live on the wife's income. They have two children and middle-class expectations," she said. ''It's a radical transition when you go from two incomes to one. When things are good you think it's always going to be good."
Elizabeth Flattes, 56, another Brockton homeowner, knows too well what it's like when things go downhill quickly. She is fighting to avoid foreclosure, and once had to use a court injunction to fend off an auctioneer who showed up at the her house because of a foreclosure filing. The Boston-based Association of Community Organizations for Reform Now -- known as ACORN -- is trying to help her save her home.
Flattes, who is disabled, lives in a three-bedroom split-level house, which she has refinanced several times. The mortgage is more than $1,000 a month. She doesn't work and receives $840 a month in Social Security.
Until a year and half ago she ran a delivery service based out of her home. But when her truck died, so did the business. She fell $10,000 to $12,000 behind on the house, which she paid $21,900 for in 1972 and is now assessed at $270,000.
She wants to sell the house to her 35-year-old son. But he is having trouble getting a lender because her mortgage company filed a foreclosure notice.
Flattes says she refuses to let the house, which was bought with money from her deceased father's life insurance, be lost to foreclosure.
''This house has been here for so many, for family, for friends . . ." said Flattes, her voice trailing off.
Sandy Coleman can be reached at sbcoleman@globe.com. 