Foreclosure takes 12,430 homes in Mass. in '08
Recession propels 62.4% rise from '07
The escalation of the housing crisis in Massachusetts resulted in 12,430 borrowers losing their homes last year to foreclosure, a 62.4 percent jump from 2007, according to data released yesterday by real estate tracker Warren Group.
However, the number of foreclosure petitions, the first step in the process, dropped 26.3 percent to 21,804 last year, prompting some housing analysts to express tepid optimism that the crisis may not worsen.
"What I'd like to think is that lenders are working more diligently with homeowners, trying to give second and third chances to anybody who seems like they have a chance to be on good standing in the future," said Timothy Warren Jr., chief executive of Warren Group.
Paul Willen, a senior economist for the Federal Reserve Bank of Boston, expects the number of homes seized in foreclosure to remain steady as borrowers continue to struggle during the recession and a period of falling home prices.
The positive news, such as it is, is the vast percentage of vulnerable borrowers with subprime mortgages already have lost their homes.
"This is a very elevated level of foreclosure activity, and it will continue to be a problem for the foreseeable future," Willen said. "I don't expect it to get dramatically better. The only good news, if you can call it that, is that we don't expect the rate to get significantly worse."
The drop in foreclosure petitions last year was partly linked to a new Massachusetts law requiring lenders to give delinquent borrowers 90 days to get their finances in order. Foreclosures plunged in May, when the law went into effect, only to surge again in September, after the first three-month waiting period rolled over.
Foreclosures continue to plague certain communities. In Wellesley, for example, there were no homes lost to foreclosure in December, and only four in all of 2008. In Dorchester, by contrast, the number of seized homes last year jumped 76.1 percent, to 641, from 364 in 2007.
Jenifer McKim can be reached at email@example.com.