Despite improving market, foreclosures continue to rise in Massachusetts
While banks are increasingly initiating foreclosure proceedings, many homeowners are negotiating with banks and buyers to avoid foreclosure.
Home sales in Massachusetts are at their highest point in a decade. Over 5,000 single-family homes sold in September. The median price was $330,000, which is up 3.1 percent from the same time last year.
The good news comes with a caveat, however: foreclosure starts also continued to rise in September. So while residential real estate in Massachusetts continues to improve, certainly many homeowners still find it difficult to meet their mortgage obligations.
While home prices are increasing, wage growth has remained slow. That means many people are finding it harder to pay for the increased cost of living. And while homes have regained much of their value, many homes remain underwater, meaning the homeowners owe more on their homes than they could get for it by selling on the open market.
The economics of Massachusetts real estate means that foreclosures remain a possibility for a significant number of homeowners. In September, Massachusetts continued to see a rise in foreclosure starts. Lenders filed 1,179 foreclosure petitions in land court during the month, which is up over 50 percent from 2014.
Foreclosure starts are not the end of the story
Fortunately, homeowners have options when faced with foreclosure. Just because foreclosure proceedings have been initiated, the result does not necessarily have to be the homeowner’s removal from the property. There are several ways to save a home from foreclosure.
There is evidence that more homeowners are taking advantage of these options. The actual number of foreclosures completed has risen significantly less than the number of foreclosures initiated by banks. There were 551 completed foreclosures in September, which is up 9 percent from last year.
The data suggests that a number of homeowners have successfully negotiated with their lenders or managed to remain in their homes despite facing foreclosure.
Options when faced with foreclosure
Banks and mortgage lenders have been more willing to negotiate with homeowners behind on mortgage payments since the housing crisis of the late 2000s. Foreclosure is an expensive process for everyone involved, including the lender. Alternative options can be beneficial to all parties involved. These options include:
- A home loan modification
- A short sale
- A traditional sale before the home is foreclosed
- Reorganizing debts under a Chapter 13 bankruptcy
While the specific steps to each option is beyond the scope of this brief article, each of these methods allows a homeowner to either begin making manageable payments on the home or recouping losses and moving on from their residence, without incurring the damage to credit caused by a foreclosure.
Contact an experienced residential real estate lawyer for your options
Because each individual circumstance is unique, the best option for avoiding foreclosure may vary. Homeowners behind on mortgage payments or facing foreclosure should therefore contact Levin and Levin, LLP, a team of attorneys dedicated to helping struggling homeowners remain in their homes with the least time and expense possible.
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