Foreclosures Slow In MetroWest
After six months of ramped up foreclosures, July brought an unexpected slowdown across the state, with new foreclosure petitions in MetroWest falling at twice the rate as the rest of the state compared to a year ago.
Statewide, petitions fell 16.9 percent to 1,198 in July. The drop was far steeper In MetroWest, where foreclosure starts they fell 34.4 percent to 80, according to an analysis of data provided by The Warren Group.
Meanwhile, auctions fell 14 percent in Massachusetts, and foreclosure deeds – signifying foreclosure completions – fell 17.1 percent. In MetroWest, auctions fell 22.4 percent and deeds fell 7.5 percent.
Improving Economy Cited
Warren Group CEO Timothy Warren, Jr. gave partial credit to an improving economy for the slowdown.
"A strong economy and recovering housing market is helping lift consumer confidence," Warren said.
The second factor, he said, is banks returning to "standard foreclosure processes."
Banks slowed foreclosures in 2011 amidst legal challenges, but ramped up the pace this year to work through the accumulating backlog.
Warren said fewer deeds and starts means homeowners are making payments and working out defaults through short sales and loan modifications.
Banks could be looking ahead to the impact of a new state law, signed into law on Aug. 3 by Gov. Deval Patrick, which requires lenders to determine whether the value of modifying the loan outweighs the likely value of foreclosure. If it does, the lender must work with the borrower to modify the mortgage.
A Temporary Blip?
The July dip could signify an improving economy, but the fact remains that foreclosure starts are still up sharply this year over 2011 – by 51.7 percent in MetroWest and by 55 percent statewide.
And deeds are up by 18.5 percent and by 36.5 percent in MetroWest. Auctions have fallen slightly in both, which could be attributed to the short sales and borrower payments Warren cited.
Kristen Barlar, a Westborough-based real estate investor with Compassionate Real Estate who specializes in short sales, thinks banks and lenders still have plenty of properties to work through before the foreclosure crisis comes to an end.
"I know it's going to end sometime, but I don't think it's going to end soon," Barlar said. "I don't think it's a trend."
Barlar hasn't really noticed much change at all in her own numbers. There are still plenty of clientele to work with and the time it takes banks to unload properties in default remains the same, she said.
In the region, Framingham has the highest number of petitions so far this year at 97, up from 63 as of July 2011. Meanwhile, Marlborough has the highest number of deeds at 55, up from 28. Framingham has also had the most foreclosure auctions this year at 100.
Image credit: freedigitalphotos.net
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