Lenders initiated 29,607 petitions to foreclose on Massachusetts properties in 2007, 55 percent more than the 19,112 petitions filed in Land Court the year before, according to new statistics from The Warren Group, parent company of Banker & Tradesman.
Dukes County saw an 88 percent increase in foreclosure petitions filed in 2007 compared with the prior year, the highest percentage increase of any county in the state. The county, consisting almost entirely of island of Martha’s Vineyard, saw 77 foreclosure petitions in 2007 and 41 in 2006. Suffolk County was the site of 3,584 foreclosure petitions in 2007, a 77 percent increase over the 2,028 foreclosures initiated a year earlier.
A petition to foreclose is the first step in a foreclosure proceeding. Not all petitions end in foreclosure, however. Some homeowners manage to sell their home or refinance. Others find the money they need or work out an alternate payment plan with their lender.
The number of foreclosure deeds recorded at registries of deeds rose at an even faster pace than petitions in the past year. In 2007, 7,653 foreclosure deeds were recorded – more than double the 3,086 filed in 2006, according to The Warren Group. A foreclosure deed shows a lender has repossessed a property from the borrower.
Lenders also are filing more petitions to foreclose than at any time in recent years. In November and December of last year, they filed 2,723 and 2,729 foreclosures, respectively, in Massachusetts. Only August and October saw higher numbers; in both of those months, more than 3,000 petitions were filed.
A foreclosure petition can take months to resolve, but the increased petition numbers indicate more people will lose their homes in the coming year due to the widening crisis.
Jim Campen, executive director of Americans for Fairness in Lending and author of an annual research report on mortgage lending patterns in Greater Boston, said the numbers no longer surprise him.
“The very high numbers are no longer shocking, but they’re appalling,” he said. “There’s a great human cost involved.”
Campen said he sees a possible sign of hope in the fact that November and December had fewer foreclosure petitions filed than in August and October.
“There may be some seasonal pattern, but there have been increasing amounts of attention put on this since September,” he noted. “It’s possible that attention by regulators and the media resulted in some lenders not being so quick to foreclose Â… it could be that some of the efforts to prevent foreclosures are beginning to work.”
Campen said the number of foreclosure proceedings commenced and completed this year won’t be dictated by the economy or home prices alone.
“Those are important,” he said. “But it also will depend on what efforts are made by lenders, and what kind of pressure is put on lenders by regulators and legislators so that [homes] don’t end up in foreclosure.”
Rank and File
The top 20 companies filing petitions to foreclose in Massachusetts in 2007 included Deutsche Bank, Wells Fargo Bank, Countrywide Home Loans, Lasalle Bank, Citimortgage, Chase Home Finance, Bank of America and Fannie Mae. Companies filing foreclosure petitions may not be the original lender, but often are loan servicers or bank investors that purchased the loans.
Six of the top 20 – including Deutsche Bank, which filed 4,652 petitions to foreclose in Massachusetts Land Court, more than any other foreclosing entity – were servicers that do not originate loans.
Appearing in the top 100 were several Massachusetts-based banks and credit unions, and some regional banks. Sovereign Bank, at No. 25, filed 172 foreclosure petitions in Massachusetts in 2007; Citizens Bank, at No. 34, filed 131.
Further down the list, MassHousing, formely known as the Massachusetts Housing Finance Agency, the quasi-public agency specializing in affordable housing loans and assistance), filed 65 petitions to foreclose in 2007, placing it at No. 46 on the list, according to The Warren Group. But MassHousing spokesman Eric Gedstad said by MHFA’s own count, it filed only 49 petitions to foreclose last year. He said some of the discrepancy could be accounted for by the fact that sometimes, MHFA has to petition the same person twice if he or she falls into arrears after attempting to work out a loan. It’s also possible that outside servicers that have a few MassHousing loans filed petitions to foreclose on MassHousing’s behalf, he said.
Gedstad said “most” MassHousing foreclosure petitions don’t actually foreclose, but declined to be more specific. He noted that his agency has 9,600 active loans in its portfolio, of which 49 petitions represents a “tiny” fraction, about one-half of 1 percent.
He was not able to provide details on what types of loans or borrowers ran into trouble last year.
TD Banknorth, which filed 61 petitions to foreclose in Massachusetts in 2007, declined to provide details on those loans or their outcomes, citing customer privacy.
Eastern Bank, which filed 56 petitions last year, according to The Warren Group, said only one of them has actually foreclosed.
The bank was not named on any foreclosure deeds in 2007, according to research by The Warren Group.
“I think the fact that we filed the petitions indicates we’re serious about making sure people pay their loans,” said bank spokesman Joseph Bartolotta. “But on the other hand, the fact that we only foreclosed on one property indicates we’re willing to work with borrowers to either repay the loan or sell the property.
“Foreclosure is such a drastic action,” he added, “and we’re not interested in becoming property owners. We’re more interested in helping people maintain their homes.”
Salem Five Bank filed 39 petitions to foreclose last year, The Warren Group data show.
HarborOne Credit Union in Brockton filed 15 foreclosure petitions in 2007, of which five ended up in foreclosure – meaning the other borrowers were able to refinance or find the money to catch up, said President and Chief Executive Office James Blake.
Blake, who noted that HarborOne does not do subprime or interest-only loans, said those loans that actually foreclosed did so due to more “traditional” reasons that might cause a borrower to default on a loan – medical concerns and divorce.
