Friday, April 15, 2016

Mortgage Foreclosures

REMINDER: The Middlesex North Registry of Deeds (and all state and municipal offices) will be closed this coming Monday, April 18, 2016, for the Patriot's Day holiday.

In other news, the number of foreclosures is increasing in the Middlesex North District. In the first quarter of 2016, the number of foreclosure deeds recorded rose 154% (up from 26 in 2015 to 66 in 2016) and orders of notice increased 58% from 81 to 128.

Because such an increase is worrisome, I took a closer look at the foreclosure deeds for properties in Lowell. The mortgages that were foreclosed had almost all been originated prior to 2008 when the real estate market collapsed, so the distressed owners have owned these homes for at least six years. Have they suddenly become unable to make their payments or have they been in trouble for longer periods of time? Someone suggested to me that the latter case is most likely and that banks have just deferred any action on the properties. Now that values are increasing, however, the banks may have decided to go forward with these foreclosures. Although people already deeply in financial distress will be unlikely to salvage their homes, those who are current or just slightly in arrears, might be aided by rising values. If the current value of a property exceeds the amount owed on the mortgage, a home owner unable to make current payments could always sell the property, pay off the debt with the proceeds of the sale, and get on with life. True, they would still need a place to live, but it's probably better to have emerged as an arms length seller than as a person who lost a home to foreclosure.  

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