Foreclosure Update

There was good news and bad news on the foreclosure front here in Massachusetts recently.

A new state law that took effect May 1 has postponed the first step in the foreclosure process for many homeowners, as it requires lenders to give borrowers 90 days to "cure" a default before filing a formal "petition to foreclose". As a result, petitions to foreclose dropped nearly 90% in May. There were "only" 390 petitions to foreclose filed in May, compared to 3,327 the month before.

On the "bad news" side, foreclosure deeds (the final step in the foreclosure process) broke another record in May, and have more than doubled so far this year. There were 1,405 foreclosure deeds recorded in May 2008, an increase of 108% from May 2007. So far this year (through May 31), there have been 5,576 foreclosure deeds recorded in Massachusetts. That's a 140% increase over 2007 levels, when there were 2,327 foreclosure deeds recorded in the first five months of the year.