Foreclosures Explode By 300% In North Central Mass. In 2007

January 28th, 2008

According to a study released this week, foreclosures have shot up in Fitchburg and Leominster last year with figures more than three times that of last year. According to the Warren Group study, almost 200 homes received foreclosure deeds in Fitchburg and Leominster in 2007, a massive increase from the modest 74 deeds handed out in 2006. A foreclosure deed is one of the last steps in the foreclosure process.

According to the Boston real estate research firm, this 170% increase between 2006 and 2007 was higher than the state average increase of 150%. Timothy Warren Jr., CEO of the Warren Group warns that the worst may be yet to come.

Mr. Warren adds “The rise in foreclosure deeds fell off a little bit in October and November, but rose more than 100 percent again in December, a clear signal that this problem is far from over,”

Senior Vice President of lending for Workers’ Credit Union, Timothy Gray, said that he too feels that foreclosures will continue their rise well into 2008. He adds that “I am kind of optimistic. I think by this time (in) 2009 we’ll be looking at a rosy picture, but the market needs some time to realign.”

The true face of foreclosures impact has been kept hidden due to the lengthy amount of time it takes to fully process a foreclosure. Gray also says “One of the problems is it takes a while for people to know these things are going on,”.

Vincent Valvo says that bankers and lenders got a whiff of this problem as early as 2004, with the decline in housing prices, but no one had any idea that the 2007 numbers would be like this. He is the publisher of the Warren Group’s Banker & Tradesman magazine.

Valvo says “Nobody, literally nobody, expected this.You did start to see some action in 2006. That was sort of a warning bell .” This came nearly a decade after lenders had been giving money to people who were high risk candidates for defaulting on their loans, just to earn that extra interest. Valvo adds that in hindsight, many people who should not have qualified for loans got them, though busines practices at that time said otherwise. He expects the recent rate cut by the fed will help in improving market conditions, but it will ultimately depend on the market itself.

Valvo feels that the decline may continue wel into this year, but is confident that the market will find its feet soon as well. He urges people with a steady job or income stream with low debt to go out and buy now as things are likely to be close to the bottom.