Why Worcester County Foreclosures Have Skyrocketed
Friday, April 27, 2012
2011 saw significantly fewer than the previous several years, due in large part to the lawsuit brought by state attorneys general and an extension of the right-to-cure period to 150 days.
“Banks are stepping up foreclosures all over the country, and Massachusetts is no exception,” said Warren Group CEO Timothy M. Warren Jr.
There have been 760 foreclosure petitions filed for homes in Worcester County during the first quarter of 2012. Of these, 181 are in Worcester. For the same period in 2011, there were 115 in the city, and there were 436 in all of Worcester County.
Statewide, there were 1621 foreclosure petitions filed in March, 55 percent more than March 2011’s 1048. Petitions for the first quarter figures 2012 were 4348, 72 percent more than 2011’s 2535.
Foreclosure petitions are the lender’s first step in taking a property by foreclosure.
The final step in the process, the foreclosure deed, also saw significant gains this year compared to 2011. The city has recorded 115 foreclosure deeds so far this year, 21 percent more than the 95 recorded during the first quarter 2011. Worcester County has processed 55 percent more foreclosure deeds in 2012 (502) than it did for the same period in 2011 (324).
Statewide, foreclosure deeds posted a sharp increase in March, rising 36.5 percent to 856, up from 627 in March 2011. Foreclosure deeds totaled 2,254 in the first quarter of 2012, a 34.4 percent increase from 1,677 in the first quarter of 2011.
“We should note that foreclosure activity this year is well below the peak levels that we saw from 2007-2010,” Warren said. “For example, March's elevated number of petitions to foreclose is still 37 percent below the number we saw in March 2010.”
Banks Working Through Backlog
Steve Levine, a realtor in Shrewsbury, said he thought foreclosures had increased because banks had worked through their backlogs.
“It’s taken them a while to catch up,” he said. “And there will probably more next year.
“The faster they work through the foreclosure market, the better, as long as they do it legally.”
Levine said that getting homes through the foreclosure process was a good thing for the real estate market.
“While it’s on a short sale, no one can buy it,” Levine said. “That process can take six months to a year, and may not ever happen. Once the bank takes possession of a home for $250,000, they can sell it when they get an offer for $250,000.
Worcester Foreclosures Recovered Early
Grace Ross, GoLocalWorcester MINDSETTER™ and community activist, said that foreclosures in the city started to increase last summer.
“We were harder hit already than the rest of the state,” Ross said. “Our numbers got back on track before the rest of the state.
More Action Needed
Ross said she thinks the state is only one-third of the way through its foreclosure crisis, and that additional consumer protections are needed.
“We’re looking at another 8 to 10 years of this,” she said. “We’re going to have to have mandatory mediation.”