Foreclosure activity in Massachusetts surged 62.4 percent in 2008 compared to 2007, and was nearly four times the level seen in 2006, according to The Warren Group, publisher of Banker & Tradesman.

A total of 12,430 foreclosure deeds were recorded last year, up from 7,653 in 2007 and 3,130 in 2006. In December, there were 936 foreclosure deeds, a 5.4 percent increase from November’s 888 deeds and 37 percent increase from the 683 deeds in December 2007.

December marked the fourth consecutive month in 2008 that foreclosure deeds fell under 1,000. The bulk of last year’s foreclosures – nearly 60 percent – occurred between March and August, when more than 1,000 foreclosure deeds were recorded each month.

"Sadly, over 12,000 people lost their homes to foreclosure last year. The state experienced the sharpest increases in foreclosures in the first half of the year," said Timothy Warren Jr., CEO of The Warren Group. "While foreclosure deeds were increasing by double-digit percentages during the latter part of 2008 compared to the prior year, the increases were nowhere near what was happening in the first half of the year, when foreclosure deeds were more than double what they were in 2007."

Foreclosure petitions, the first step in the foreclosure process, ended the year below the level reported in 2007. Lenders filed 21,804 foreclosure petitions in 2008, down 26.3 percent from 2007 when there were 29,572 foreclosure petitions. The drop-off is linked to a law that went into effect last year that requires lenders wanting to initiate a foreclosure to give delinquent borrowers 90 days to pay off mortgage loan defaults.

During the month of December, foreclosure petitions jumped 21.7 percent to 1,625 from 1,335 in November, but were 40.4 percent lower than the 2,724 petitions filed during the same month in 2007. Lenders filed more than half of the year’s petitions during the first four months of 2008.

"If there is any good news to report, it’s that there weren’t as many people entering the foreclosure process in 2008 as there were in 2007. The new law requiring lenders to give homeowners three months to cure mortgage defaults played a big role in the dip in foreclosure petitions in the middle of the year," said Warren. "But there has also been a trending down in foreclosure petitions in the last few months. In early 2008, lenders were filing an average of 3,000 petitions to foreclose each month. Toward the end of the year, that number fell to below 2,000."

The Warren Group also tracked 19,270 auction announcements in 2008, a 32.5 percent increase from 14,546 in 2007, and 189.4 percent higher than the 6,659 auction announcements reported in 2006. Auction announcements in December climbed 6.3 percent to 1,206 from 1,134 in November and 11.6 percent from 1,081 during the same month a year earlier.