The Flipping Pad

Posted by James F. on Feb 11, 2010 12:59pm

Homes from foreclosures declined in number in Massachusetts last year, but mortgage defaults stepped up, according to data from Warren Group, which publishes reports on New England real estate.

Foreclosure filings in the state dropped to 9,269 in 2009, down by over 25 percent from 2008, when 12,430 foreclosures were filed.

The number of mortgage defaults, however, rose by more than 28 percent to almost 28,000, compared to 2008.

Additionally, the increase in foreclosures in affluent neighborhoods like Concord, Weston and Winchester, is raising concerns because it shows how severe the recession has been. Even the island of Nantucket, where wealthy families enjoy their privacy, has not been spared. Indeed, the island experienced the highest increase in foreclosure filings in Massachusetts last year, posting a 733-percent jump from only 3 filings in 2008 to 25 filings in 2009.

In December, foreclosures also declined on a year-over-year basis, but defaults grew. The number of delinquency notices rose by almost 27 percent to 2,060 while the number of homes repossessed by lenders declined by 8.4 percent from December 2008 to 857 last December.

According to analysts, the number of homes from foreclosures in Massachusetts declined largely last year because of a landmark decision issued by the Massachusetts Land Court that forced lenders to clean up their foreclosure documents before filing them. Others said that lenders have been allowing distressed homeowners to work out loan modifications even if their efforts were expected to just postpone actual foreclosures.

According to Paul Willen, economist of the Federal Reserve Bank of Boston, the housing market is showing signs of stabilization, but the problems of high jobless rates and underwater mortgages are blocking the way to recovery.

Some realtors, however, see opportunities in the decline of home prices in affluent neighborhoods because of the housing crisis. Framingham broker Annette Norton said foreclosures in the $1 million range are giving opportunities to buyers who have been previously considering more expensive homes.

In the meantime, a number of Boston foreclosed homes for sale will be acquired by the city this year using the more than $13 million it received from the federal government under the Neighborhood Stabilization Program. The funding is part of the $47.9 million received by the state to revitalize its struggling neighborhoods.

According to Boston Mayor Thomas Menino, the money will be spent to rehabilitate homes from foreclosures in the neighborhoods of Roxbury and Dorchester, where there are many deteriorating vacant properties.

Original Post: Homes from Foreclosures in MA Declined, but Defaults Increased on ForeclosureDeals.com.