Fewer Foreclosure Filings Have Been Noted

February 11th, 2009

In 2008 foreclosure postings had skyrocketed but according to the latest reports fewer foreclosure filings have been noted.

The foreclosure is the first step towards taking over a property from an owner who has lagged behind in mortgage payments. The Warren Group reported this latest piece of good news.

Repossessed House numbers are decreasing because of many factors. Bankers are now more cooperative about modifying loans or proceeding with short sale that involves accepting losses, said Joseph Carvalho of Exit Realty Advisors in New Bedford. The banks are now realizing that it is to their own interest to allow loan modification. If they do not then their losses are greater if they pursue the path of foreclosure. Carvalho added, “We see a lot more short sales being accepted by banks and more loan modifications. That’s cutting down on foreclosures.”

Another reason for the decline in foreclosure numbers is the moratorium placed on it by the mortgage giants Fannie Mae and Freddie Mac. It was due to expire on 9th January but has been extended to the last day of the month.

In 2008 foreclosures in Massachusetts spiked by 62.4% in comparison to the previous year. It is four times more than the foreclosure figures of 2006. But foreclosure petitions have dropped by 26.3% according to The Warren Group. Timothy Warren Jr. of The Warren Group said in a statement, “The state experienced the sharpest increases in foreclosures in the first half of the year. 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.”

Similar trends are noted from local data. In Bristol County the bank repossessions had been 47.2% higher in 2008 in comparison to 2007 and four times more to that of 2006. Plymouth County noted 48.3% increase in foreclosures from 2007 and three times more than the numbers of 2006. Barnstable County showed a jump of 77.5% in 2008 in comparison to 2007 and five times spike from 2006. Simultaneously foreclosure petitions dropped in 2008 by 26.1%, in Bristol County by 27.1%, in Plymouth County by 27.1%, by 27.2% and in Barnstable County compared to the previous year.

The Warren Group analyses the fall in petition numbers to a new state law introduced last summer that makes it mandatory for lenders to allow 90 days grace to delinquent borrowers before proceeding with foreclosure.