Foreclosures Rise 66% in Massachusetts

Posted in Foreclosures, August 31st, 2006 |

Foreclosure filings in Massachusetts increased 66 percent in the second quarter, according to data released yesterday, a trend that is expected to continue over the next year. During the second quarter, 4,292 notices of foreclosure against homeowners were filed in the state, a figure which is up from 2,585 in the same period of 2005.

Many believe this trend is going to continue over the next few years, as the effects of a flooded housing market come to light now that a long period of hot investment has come to an end.

While these numbers do not automatically mean all foreclosed homeowners will lose their homes, it does mean that some will, and that even more houses will be on the market in an attempt on the part of those in default to pay off their debt and salvage some value. However, this will likely only flood the market further, making it increasingly difficult for anyone to sell a home.

Many who used adjustable rate loans to purchase new homes either for investment or summer rental properties are stuck with rising interest rates without any of the planned additional income form the homes to pay for them. The slow market means investors can’t sell houses, and the subsequently weak market for vacation rentals means no extra money is available to go towards the mortgage. This can lead to default, and eventually, foreclosure.