The number of foreclosures in Massachusetts fell in November, touching the lowest level in a month in over three years even as major lenders suspended foreclosure action in order to correct procedural deficiencies in paperwork conducted by them.
Last month, there were 416 foreclosures recorded standing for a 41% fall from 2009 November levels and it stood for a historic low recorded since 2007 February. The fall was recorded by the South Boston based Warren Group which means that the number of foreclosure properties in 2010 would not exceed the levels in 2008.
In much of 2010, the foreclosure rate had been proceeding to pass the 12,430 foreclosures that were recorded in 2008, according to Timothy Warren, CEO of Warren Group.
According to Warren, November was the second month in a line that the count of foreclosures plunged year-over-year in Massachusetts. But he was of the opinion that the slowdown in foreclosures was more due to the freeze of foreclosures announced by big banks, such as Bank of America, for reviewing internal procedures of foreclosure than to major improvement in default rates of mortgages.
Freeze on foreclosures was announced more in 23 states which require review of foreclosures judicially. In these states, there were reportedly many incidences of robo-signing, where employees of banks signed away thousands of foreclosure affidavits in a small interval of time without verifying facts and details. However, some major banks froze foreclosures in other states as well in Massachusetts.
According to Warren, lenders considered the negative publicity due to the robo-signing scandal as well as sloppy paperwork and called for a time out to make sure that they are using the best procedures that are obtainable in the industry in order to process their foreclosures. This time-out is itself slowing down things and they may have piled on other procedures legally. This might have contributed more to the bureaucratic mountain before they can call for the start of a foreclosure.
Dick Cahill, a Norwell based executive with the Jack Conway and Co. real estate brokerage, said that his institution was engaged in trying to sell over 150 bank-repossessed homes where the process of sales was suspended around two months back. He said that these foreclosures and other such sales are being tracked now by the major lenders on a more meticulous basis that in turn helps in the stabilization of the Real Estate market locally. Cahill said that the foreclosures were not arriving in waves and, therefore, not destroying the market, and the situation is practically manageable.
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