Massachusetts foreclosures up a bit; bankruptcies perhaps to follow?

There has been an uptick in foreclosure petitions filed in Massachusetts recently, although it appears to have housing experts baffled as to what, if anything, that might mean.

According to the Boston Globe, fourteen percent more foreclosure petitions were filed in April than in March. Foreclosure petitions signal the start of the foreclosure process, with the lender applying to a court for permission to hold an auction. The actual auction sale comes later.

April had the highest rate of filings since last September. This could represent lenders coming to grips with new laws put in place last years mandating longer waiting periods before resorting to foreclosure.

On the other hand, it could also just be gloom and doom in the economy. “Banks are picking up their foreclosure activity,’’ said Nadine Cohen, a managing attorney with the Greater Boston Legal Services, a nonprofit that works with low-income clients. “The economy is never going to improve until we deal with the foreclosure crisis.’’

Barry Bluestone, dean of the School of Public Policy and Urban Affairs at Northeastern University, saw it differently — he thinks the economy is picking up a bit: The local economy is starting to improve, he said, something which should help limit the number of foreclosures in Massachusetts. Instead of a warning, Bluestone saw good news in yesterday’s foreclosure data.

“During the rest of this year we should continue to see foreclosures at a reasonable low level,’’ said Bluestone. “It is another piece of statistical evidence which gives me some greater confidence in the Massachusetts economy.’’

My own take on this is that the economic collapse of 2008 may now have reached equilibrium, with housing prices stable but low, and foreclosures routine, but not at panic levels, and bankruptcy filings following suit.

As a bankruptcy attorney, however, one thing I do know for sure: A bankruptcy filing will still stop a foreclosure sale cold, and although I can never recommend procrastination, my office has gotten some of them filed in as little as 48 hours before the scheduled sale.

 

By Doug Beaton

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