Ever since foreclosure petitions began to spike in the beginning of 2014, Banker & Tradesman has been carefully tracking the monthly ebb and flow of foreclosures in the Massachusetts housing market.
The Warren Group, publisher of Banker & Tradesman, has been tracking foreclosure petitions, deeds and auctions for over a decade, but the numbers took a nosedive in 2013 while the industry adjusted to a number of new federal and state regulations and awaited the results of several court cases. The 2014 spike was attributed to a backlog of paperwork, as lenders caught up on the petitions that would have been filed in those months but were not, for a variety of reasons.
At the time, industry experts said it would be – optimistically – another year before the numbers returned to normal. Realistically, they said, it could be closer to 18 months or two years.
Those two years were up in March. Foreclosure figures for the month of May are now in, and the results are not as staggering as they have been – but they’re not great either.
Statewide, petitions to foreclose were up nearly 29 percent in May 2016 versus May 2015. There were 1,130 petitions filed this May, compared to 878 last year. Year-to-date, petitions are up nearly 27 percent over last year.
Auction notifications were up 53 percent for the month and 41 percent for the year; deeds filed at the various Registries were up 33 percent for the month and almost 48 percent for the year.
There is a certain logic to this. The Warren Group’s analysis estimates it takes about five quarters for a foreclosure to reach completion – assuming it does – and petitions started to climb again about eight quarters ago, so it makes sense that auctions and deeds would be up substantially.
What has not been adequately explained is the continued climb in deeds filed. By even the most conservative estimates from that time – and really, the most lenient allowance for best practices – the backlog should at this point be cleared; the paperwork should be all done.
Real estate does not lend itself to a black-and-white analysis at the best of times and all estimated timelines must be regarded as just that. Still, petitions continue to climb.
Without a doubt, some of these petitions are not attributable to paperwork or delayed decisions; barring complete governmental overreach or a gold rush in the Berkshires, petitions will never sink to zero. The reasons why a homeowner may be facing foreclosure are deeply personal, often tragic, and unlikely to be shared, which is understandable, but complicates the reading of our current situation.
B&T reporter Jim Morrison looked into the rising numbers back in March, when attorneys said their initial two-year estimate was shy of the mark, that an additional two years might be needed to really get back to “normal.”
That may be. Or it may be that there is no longer a “normal” in Massachusetts’ foreclosures. Either way, the industry has some explaining to do.
