This may be beginning to sound like a broken record, but the foreclosure rate in Massachusetts is way up again — enough so that the leader of the Warren Group that tracks banking news has called the situation “staggering.”
Quoted in the Boston Globe, Timothy M. Warren, Jr. noted that more than 1000 Massachusetts homes have been taken in every month of this year save one.
According to the article, Cambridge lawyer Paul Collier said the continuing flood of foreclosures could further hurt the struggling housing market and indicates that lenders are still balking at helping borrowers to modify their loans.
“As long as we continue to pour thousands of foreclosed homes into the market every month, there will be no recovery,’’ said Collier, who represents clients fighting foreclosures. “Banks are doing nothing to modify and keep people in their homes.’’
The high rate of foreclosures may be an indication that banks are stepping uop their efforts to get bad debt off their books. but that means they are coming down hard on home owners.
Homeowners caught in a foreclosure situation may be able to turn to the bankruptcy code for help. In a best-case situation, debtors who still have income coming in may be able to save their house through a Chapter 13 plan, and might even be able to eliminate home equity loans or second mortgages.
Even in a worst case scenario, bankruptcy has the advantages of buying the debtors some more time in the home, and preventing a bank or collection agency from coming after them for a deficiency balance if the foreclosed property doesn’t fetch enough at auction to pay off the loan.
By Doug Beaton