Foreclosure deeds on Massachusetts properties continued to rise in February compared to one year ago, according to new data from Banker & Tradesman’s parent company, The Warren Group.
Statewide, the number of deeds recorded rose 146 percent, from 350 in February 2007 to 860 last month.
However, just eight of 15 counties showed more deeds recorded in February compared with the prior month. Six counties saw fewer deeds recorded in February this year compared to January while one, Nantucket County, had no foreclosure deeds recorded in either of those months. Increases and decreases were marginal in all cases.
A foreclosure deed is the final step in the foreclosure process and conveys ownership of a property, usually back to the lender.
John H. Pearson Jr., president and chief executive officer of Lowell-based Butler Bank, said the mixed results comparing January and February foreclosure deeds are the most interesting to him.
“Last year is ancient history,” he noted.
Some of Butler Bank’s outstanding property loans have started getting payments this month, Pearson added, and the bank also has been hearing more from customers who want to work out problem loans.
In Middlesex County, where Butler Bank is located, the number of foreclosure deeds recorded increased from 110 in January to 116 in February.
Pearson said the February numbers compared with January results show him that “junk properties may have been worked out of the system, and now we are coming to people who are able to afford or fight to keep their property.”
But in Worcester County, where more foreclosure deeds were recorded last month, and year-to-date, than in any other Massachusetts county, Oak Hill Community Development Corp. Executive Director Mullen Sawyer said he thinks the lower February numbers in some centers compared with January numbers reflect the fact that fewer mortgages are originated – and have corresponding interest-rate resets – in the winter.
Mortgage interest-rate resets often result in a borrower falling behind, when he or she can no longer make higher monthly payments that result.
The number of adjustable interest-rate mortgage resets in Worcester will peak in July 2008, when 129 resets are expected, Sawyer said.
Sawyer added that 13,487 subprime loans were initiated in Worcester County in 2005 and 2006. That represents 22.9 percent of all loans written in Worcester County during that period, he added, citing data from the Center for Responsible Lending in North Carolina. CRL projects that 17.3 percent of those loans will enter foreclosure.
According to Worcester Housing Director Scott Hayman, the region’s climbing foreclosure rate is a function of inflated real estate prices in Massachusetts, and especially Worcester County, in the last two years. The county’s increase in home prices and sales rose, for a time, at a rate that caught national attention, he said.
The 151 foreclosure deeds recorded in Worcester County last month is more than double the 62 recorded in February of last year, and an increase of 32 over the 119 deeds recorded in January. A total of 270 foreclosure deeds have been recorded there year-to-date.
In some counties, the year-over-year increase in foreclosure deeds recorded remains startling. Plymouth County, for example, saw that number increase more than fivefold compared to last year. Eighty-nine deeds were recorded there in February 2008, compared to just 13 one year ago.
Foreclosure petitions – when a lender initiates the process against a borrower in Massachusetts Land Court – also have increased year-to-date in 2008 compared to the same time last year. Lenders filed 6,047 petitions to foreclose in January and February 2008, compared to 4,240 petitions filed in the first two months of 2007.
More petitions to foreclose have been filed, year-to-date, in Middlesex and Essex counties than any other region. Lenders filed 1,019 petitions to foreclose in Middlesex County, Massachusetts’ most populous county, and 826 in Essex County.
A petition to foreclose is a lender’s first step in a foreclosure proceeding. Not all petitions end in foreclosure, however. Some homeowners manage to sell their home or refinance, while others find the money they need or work out an alternate payment plan with their lender.
