Massachusetts Foreclosed Homes

Couple Wins Auction, But Can't Buy House

Buying a home at a multi-property auction has been difficult, if not impossible, in Massachusetts.

Another winning bidder, Alexandria MacKinnon, on an allegedly foreclosed Massachusetts home auctioned by Real Estate Disposition Corp. has found she can't close on the home because the foreclosure process is not yet complete, The Boston Globe reported May 14, 2008.

 

After a March auction, Real Estate Disposition Corp. told MacKinnon and her husband to prepare for a closing by May 8, 2008, so the couple gave notice to their landlord and qualified for a mortgage loan. Then the closing was postponed indefinitely because the mortgage company that was working for the buyers told them it couldn't make the loan because the seller did not yet own the home.

"Real Estate Disposition was warned by state regulators before the March auction against including any properties it did not have the right to sell. The company has said it auctioned several such properties at a previous event in November."

Buyers are faced with a great deal of frustration when dealing with banks and the companies that represent them. Buyers also make the mistake of attempting to complete the process without professional representation.

Read The Boston Globe Article

Another Copper Thieves Story

The media can't get enough of the stories about thieves stealing copper from foreclosed homes or otherwise abandoned property.

A May 14, 2008 article in The Boston Globe talks about an "epidemic" of thefts.

"Scrap copper, which sold for about 75 cents a pound a decade ago, now sells for more than $3 a pound. Demand from countries with rapidly growing economies, such as China, has pushed up the price."

Shouldn't the stories be about what kind of loser breaks into a home, tears out walls and cuts out copper pipe for $3 a pound?

Read The Boston Globe Article

Massachusetts Foreclosures Continue Record Pace

The first quarter of 2008 saw the number of Massachusetts home owners enter the foreclosure process at a record pace, the Boston Business Journal reported May 7, 2008.

"The state saw 9,114 new properties enter foreclosures, up almost 38 percent over a year ago and the third record-breaking quarter in a row, according to data provider ForeclosureMass.com."

More than 75 percent of the state's 351 communities saw foreclosure rates increase in the past year, with 73 municipalities seeing at least a 75 percent increase in filings.

Read The Boston Business Journal Article

MA Law Extends Foreclosure Notification Period

A Massachusetts law that extends the foreclosure notification period to 90 days went into effect on the first of the month, the Boston Herald reported May 1, 2008.

The law requires lenders give borrowers 90 days after a notice of delinquency to resolve their debt. The previous law required only 30 days notice.

"Gov. Deval Patrick says the new rules are aimed at avoiding unnecessary foreclosures and allowing more people to stay in their homes. He’s asking lenders to use the 90-day period to restructure as many loans as possible."

As of July 1, the law will also require the licensing of all mortgage loan originators (aka, mortgage brokers).

Read The Boston Herald Article

Trashed Bank-owned Properties

The headline is a little misleading. It suggests that there are some bank-owned properties that aren't trashed. Well, there are, but not many.

The Boston Herald reported April 28, 2008 that many ex-owners of foreclosed properties take lighting fixtures and trash homes on their way out the door.

It's absolutely true, and it happens more often than not. It's to the point where I am amazed to see a bank-owned property that isn't in really crappy shape (Herald Photo).

"People rip up walls, kick in doors or take bathroom fixtures or copper wiring - sometimes to sell, other times just to get back at lenders."

Here's a tip: Don't open any refrigerators left behind.

"Figures on vandalized foreclosures are hard to come by, because owners can legally do what they want with homes until lenders seize property titles. Crooks also sometimes hit homes after former occupants have moved out."

When I hear about investor wannabes buying foreclosed property at auctions without seeing the inside I cringe.

“'You drive up and say, ‘Wow, what a nice house!’ ' the broker said. 'Then you look inside and say: ‘My God, what happened here?’ Short of taking the shell of the house, everything is gone.'”

Read The Boston Herald Article

1,200 MA Homes Seized In March

Nearly 1,200 homes in Massachusetts were seized last month by lenders, up about 140 percent from March 2007, The Boston Globe reported April 25, 2008.

The data comes from The Warren Group, a publisher of real estate data.

"Foreclosures during the first three months of the year topped 2,800, also up about 140 percent over the same period last year. Massachusetts is on pace to shatter the previous record for the most foreclosures in a year, set in 1992."

The foreclosures are most common in urban areas and with multi-family properties.

"In Lawrence, at the current pace, 4 percent of the city's residential properties will be seized by lenders this year."

Although many of the multi-family foreclosed properties remain on the market many months, investors appear to be buying single-family foreclosures much more quickly. In fact, my experience has been that many bank-owned, single-family properties receive multiple offers.

Many people believe the foreclosure crisis will worsen before it improves.

"There are indications that worse is yet to come: The number of petitions to foreclose, an indicator of future foreclosures, climbed by 33 percent to 2,918 in March, compared with 2,189 filed in March 2007."

What many potential home buyers don't realize (or simply don't want to believe) is that the foreclosure situation is different from community to community. Not every city or town has been affected by foreclosures.

"The problem continues to plague some communities more than others. Ninety-five Massachusetts cities and towns have yet to record a foreclosure this year. Brookline is the largest town on that list, followed by Lexington. By contrast, the cities hit hardest, including Lawrence and Brockton, are amassing foreclosures twice as fast as last year."

Based on its population, Boston hasn't had that many foreclosures. Dorchester has had more than the rest of the city combined.

Read The Boston Globe Article

U.S. Senate Bill Would Bring $211 Million To MA

A housing relief bill being considered in the United States Senate would provide Massachusetts with $211 million to boost home ownership and help homeowners avoid foreclosure, the Boston Herald reported April 3, 2008.

"The money is part of a $10 billion mortgage revenue bond program for state and local housing agencies that Sens. John Kerry, D-Mass., and Gordon Smith, R-Ore., pushed to include in the bill."

Kerry, who is running for re-election in November, said the Federal Reserve recently moved quickly to assist investment bank Bear Stearns as it stood on the brink of bankruptcy. He said the same urgency was needed to help families struggling with the foreclosure crisis.

"The new bond program could mean 1,110 new and refinanced home loans in Massachusetts, and up to 80,000 new loans nationwide, Kerry said."

Read The Boston Herald Article

About 170 Homes For Sale At Boston Auction

About 170 foreclosed Massachusetts properties were up for sale at an Auction at the Hynes Convention Center March 29, 2008, the Boston Herald reported.

Real Estate Disposition Corp, an Irvine, Calif.-based company, held the auction, but is under investigation by state officials for allegedly selling some houses at a November 2007 auction before the foreclosure process was completed, according to the Boston Herald.

I'd be a little nervous when the people working the auction are wearing tuxedos (Herald photo). After all, these are properties with leaky roofs, filthy carpets and wet basements.

Read The Boston Herald Article

Multi-family Foreclosures Rising Fast

Massachusetts foreclosure petitions continued to rise in February, especially foreclosure petitions involving multi-family homes, the Boston Herald reported March 31, 2008.

The Warren Group, a Boston-based publisher of real estate data, reported that Bay State foreclosure petitions totaled more than 2,200 in February, up 27 percent from the same month a year earlier.

Foreclosure petitions are a first step that often leads to owners losing their homes.

Foreclosure deeds, in which the owner loses the home, more than doubled to 860 in February.

"A disproportionate number of February foreclosure petitions involved two- and three-family homes. The 635 petitions for multifamily homes represented 23 percent of all petitions, but multifamily homes make up 11 percent of the state’s housing stock."

Read The Boston Herald Article

MA Foreclosures Expected To Increase In 2008

ForeclosuresMass, a provider of Massachusetts foreclosure data for a fee, released its latest Massachusetts Market Analysis Report March 27, 2008, accompanied by its forecast that foreclosure filings will continue at record levels through 2008.

ForeclosuresMass estimates that in 2008 Massachusetts foreclosure filings will increase by at least 15 to 25 percent above the historic highs reached in 2007.

ForeclosuresMass attributes the foreclosure increase to a “perfect storm” of factors. The pressures put on property owners include the effects of adjustable rate mortgages, sub-prime and other ‘exotic’ loans, the distressed lending market, decreased property values, substantially increased gasoline and home heating costs and the slumping economy.

The ForeclosuresMass March 2008 Market Analysis Report shows that foreclosures are up in 282 of the state’s 351 communities, with 74 communities experiencing at least a 75 percent jump in foreclosure filings in the past 12 months. Overall, 31,516 homeowners faced foreclosure in the past 12 months, a statewide increase of 45.6 percent.

Highlights of the ForeclosuresMass March 2008 Market Analysis Report:

• Lenders initiated 31,516 foreclosures statewide against homeowners in the 12 months from March 1, 2007 to February 29, 2008, a year over year increase of 45.60%
• In the past 12 months foreclosures are up in 282 of the state’s 351 communities, with 74 communities experiencing at least a 75 percent increase in filings
• February 2008 saw 2,861 filings, the 4th highest month on record, and 28.47% above February 2007 levels
• January 2008’s 3,230 foreclosure filings were the single highest monthly total in Massachusetts history, and represented a 46.35% increase over January 2007
• Q4 of 2007 was the highest quarter on record; final tally of foreclosures was 8,578, well ahead of Q3 2007, which had set the previous record of 8,175
• In the past 12 months Dukes, Nantucket, Suffolk, Essex, Barnstable and Middlesex Counties all experienced increases of at least 50%. Dukes County experienced a 100% increase (98 v. 49), Nantucket County saw a 64.71% increase (28 v. 17), Suffolk County had a 63.16% increase (3,836 v. 2,351), Essex County filings jumped by 58.59% (4,174 v. 2,632), Barnstable County increased by 54.85% (1,595 v. 1,030) and Middlesex County experienced a 53.09% increase (4,957 v. 3,238)

Download MassForeclosure_March_2008_Market_Analysis_Report.pdf

Lynn, MA Multi-families $200K Or Less

Lynn, Massachusetts presently has more than 50 multi-family properties on the market for $200,000 or less.

Many of these properties are owned by banks or the properties are short sales.

Search for multi-family homes for $200K or less.

Interested In Buying Foreclosed Property?

Buyers Brokers Only, LLC is sponsoring a home buyer seminar on Saturday April 5, 2008 from 10 a.m. to 12 p.m. at the Best Western (401 Lowell Avenue, Haverhill, MA) in Haverhill.

Learn about every aspect of buying a home: mortgages, pre approval, finding a home (single-family, condos, multi-families, new construction), the multiple listing service (MLS), buying bank-owned properties and short sales, negotiating the best price, home inspections, purchase & sale agreement, the closing, tips and advice from the professionals and an opportunity to ask all your questions.

Space Limited: Please RSVP by filling out the form online or by contacting Alexa by March 31, 2008 at 978.457.4552 or astone@buyersbrokersonly.com. Space is limited to 50 people.

Knowledgeable Speakers:
Richard J. Rosa, Esq., Buyers Brokers Only, LLC: Rich is a real estate broker, lawyer and co-owner of Buyers Brokers Only, LLC. He has practiced law for 12 years, and he is a member of the Massachusetts Association of Buyer Agents.

David S. Kres, Esq., Buyers Brokers Only, LLC: Dave is a real estate broker and lawyer, as well as co-owner of Buyers Brokers Only, LLC. Dave earned the North Shore Association of REALTORS® (NSAR) Rookie of the Year award in 2006 and currently is the president-elect at NSAR.

Robert Barr, VIP Mortgage: Rob is the vice president of sales for VIP Mortgage, located in Danvers, MA. He has 20 years of experience in the mortgage industry and has helped more than 1,000 individuals/families finance their first home.

Jeffrey Stelman, Esq., Schribman & Stelman, LLP: Jeff is a partner in the law firm of Shribman & Stelman, LLP, located in Salem, MA. He has practiced law for 17 years and has conducted more than 1,500 real estate closings.

Josh Amsler, Jackson Home Inspection: Josh works for Jackson Home Inspection in Andover, MA. He has more than 10 years experience as a licensed home inspector and has completed more than 6,000 home inspections. He also is a member of the National Association of Home Inspectors.

Donation: $15 per person. All proceeds going to Rebuilding Together Greater Haverhill, Inc., which helps revitalize homes and neighborhoods for low-income homeowners and communities in need, especially the elderly, the disabled and families, helping them to live in warmth, safety and independence. Please make checks payable to Rebuilding Together Greater Haverhill Inc., and please mail checks to Buyers Brokers Only, LLC, 7 Kenoza Avenue Haverhill MA 01830. Space limited to first 50 people, so please RSVP.

Haverhill, MA Multi-families $200K And Less

Haverhill, Massachusetts presently has more than 35 multi-family homes on the market for $200K or less.

Many of these properties are bank-owned properties or short sales.

Search for multi-families in Haverhill, MA for $200K or less.

November Auction Winners Still Aren't In Homes

Nearly a quarter of 300 winning bidders from a November auction still have not taken title to the properties auctioned, despite representations from the auctioneer that the deals would close within 21 days, the Boston Globe reported March 22, 2008.

"The rules were simple: The high bidder on each property paid a $5,000 deposit, signed a purchase agreement, and arranged a mortgage. The company, Real Estate Disposition Corp., told bidders they would close within 21 days of the auction. But some sales have been delayed for months because the auction company accepted properties from mortgage companies before those companies completed the process of foreclosing on the prior owners. In other cases, bidders say they have received no explanation for the long wait."

For those of us helping clients purchase bank-owned and short sale properties, nothing is a surprise. On most occasions, banks are neither operating in good faith with buyers nor making rational decisions about the sale of properties. It's no wonder so many lenders are faced with a mountain of bad loans.

"In one instance, three friends made the winning bid of $130,000 on a house in Lee. The mortgage company delayed the closing, then sent a letter in February offering to return the deposit. Before the friends responded, the company put the house back on the market for $179,000, then quickly agreed to sell it to someone else."

Real Estate Disposition Corp. apparently holds auctions to sell foreclosed homes that mortgage companies can't sell on the open market, often because the properties are in poor condition.

The article pointed out something that most people don't realize about these multi-property auctions. Most properties being auctioned have a reserve, which means if the highest bid does not reach the reserve price the seller does not have to sell the property.

The company auctioned about 300 properties over two days at the Hynes Veterans Memorial Convention Center. According to an article in the Globe at the time, some people bid on properties they never saw. My guess is that the vast majority of those people had no idea what they were getting into.

Real Estate Disposition Corp. plans to auction roughly 170 more properties at the Hynes next Saturday. That ought to be interesting. I think many of these "wanna be" investors don't seek professional advice because they don't want to hear anything that contradicts their dreams of striking it rich.

Below I have attached a brochure I give potential clients that includes basic information about foreclosures.

Read The Boston Globe Article

Foreclosure_Short_Sale_Brochure

MA Bank-owned, Short-sale Properties Reach 6%

According to a post on the Boston Real Estate Now Blog, about six percent of homes for sale in Massachusetts are either bank owned or short sales.

The data comes from Movoto, a real estate analytics firm based in California.

"The scale of the problem ranges, from 17.6 percent of homes on the market in Berkshire County to 3.6 percent in Hampden County. But the share is at least 5 percent everywhere but Hampden and Bristol counties, and it increased since January everywhere but in Hampden and Norfolk counties."

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