The number of foreclosures in Massachusetts declined by double-digit percentages in May compared to last year and the prior month, according to the latest report from The Warren Group, publisher of Banker & Tradesman. However, the number of foreclosure proceedings started by banks and other types of lenders swelled during the same period.
There were 582 foreclosure deeds recorded in May, a 58.6 percent drop from 1,405 in May 2008 and 24.3 percent below April’s level of 769. Year-to-date foreclosure deeds fell 26.3 percent to 4,110 from 5,576.
"The number of foreclosure deeds recorded in May was the lowest since April 2007. It is encouraging that foreclosures have declined for two months straight. I think lenders have realized how costly foreclosures can be and are taking steps to avoid foreclosure whenever possible," said Timothy M. Warren Jr., CEO of The Warren Group.
"But I remain concerned because unemployment has crept up, and many people who’ve lost their jobs will have trouble keeping up with mortgage payments. In addition, it also looks like the pace of initiated foreclosures has remained fairly steady over the last four months. Lenders have started over 2,000 foreclosures a month since February," Warren added.
A total of 2,329 foreclosure petitions were filed in May, almost six times the 390 foreclosure petitions filed in May 2008. Foreclosure petitions mark the start of the foreclosure process in Massachusetts. In addition, the number of foreclosure petitions climbed 15.7 percent from 2,013 in April. There were 10,978 foreclosure petitions filed from January through May, 13.7 percent lower than 12,726 last year.
"The sharp increase in May foreclosure petitions year-over-year is due to the so-called 90-day right-to-cure law that went into effect last May. The state law, which requires lenders intending to foreclose to give delinquent borrowers in Massachusetts 90 days to catch up on missed mortgage payments, artificially depressed foreclosure petitions in May 2008," said Warren.
Auction announcements fell 30.7 percent to 1,377 from 1,987 in May 2008, but climbed 26.8 percent from 1,086 in April. Year-to-date auction announcements dropped 34.7 percent to 5,825 from 8,916.
