The state of Massachusetts is feeling the residual affects of a housing market slump with petitions to foreclose increasing almost 70 percent in 2006 over the prior year, according to The Warren Group, a Boston-based publisher specializing in the distribution of New England real estate data. A 46-percent increase in homes advertised for auction between 2005 and 2006 also has painted somewhat of a grim picture in the Bay State when it comes to the real estate outlook in 2007.
In all, mortgage lenders filed 18,926 petitions to foreclose on homes in the Massachusetts Land Court last year, compared to 11,155 the previous year. While petitions to foreclose are only the first step in the foreclosure process and often can be deterred through the sale and refinancing of real estate, Massachusetts lenders officially announced 6,729 homes in foreclosure auctions in 2006, which is approximately 2,000 more homes than in 2005.

Industry experts in Massachusetts cite declining home values as a contributing factor in the significant increases of petitions to foreclose and properties up for auction in 2006.
“The median sale price for a single-family home declined by nearly 6 percent last year,” said Timothy Warren, Jr., CEO of The Warren Group. “As housing prices decline, people who had borrowed 90, 95, or even 100 percent of the value of their homes now find themselves owing more than their homes are worth. If those people have trouble making their mortgage payments and can’t sell the home for a price higher than the outstanding loan balance, then foreclosure is a real possibility,” added Warren.
A county breakdown of foreclosures throughout Massachusetts also shows dramatic increases in petitions and auctions statewide. According to The Warren Group, there were 93 percent more petitions to foreclose in Barnstable County in 2006 than in 2005, and 87 percent more in Bristol County. Meanwhile, Essex County’s petitions to foreclose increased 75 percent, while petitions in Franklin, Hampden, Middlesex, Norfolk, Plymouth, and Worcester all rose more than 50 percent from 2005.