Foreclosure deeds filed in Massachusetts fell 52% from a year ago in October, making it the lowest number of deeds of this type filed in any month since February of 2007, according to The Warren Group research and publishing firm.
Timothy Warren, CEO of the Warren Group, called it the fifth consecutive month of declining foreclosure deeds and considers it an “indicator of a housing market recovery.”
But the steep drop also comes in the wake of new state legislation that may be slowing the foreclosure filing process in the state. In fact, foreclosure deed filings began to slow last July in anticipation of the legislation.
In August, Massachusetts Governor Deval Patrick signed the “Preventing Unlawful and Unnecessary Foreclosures Act,” which forces financial firms to take certain steps to help borrowers before initiating a foreclosure.
Those provisions include a requirement that lenders foreclosing in the state prove loan ownership before moving ahead with a foreclosure.
Furthermore, the bill creates criminal liabilities for servicer misrepresentations in state or federal filings. In addition, certain fees and business referrals to third parties for foreclosure work are banned.
Servicers under the Massachusetts rule also have to consider borrowers for a modification, short-sale or deed-in-lieu before moving forward with a foreclosure.
Just a few months after the bill’s passage, the state recorded only 371 foreclosure deeds in October, down from 775 filings a year before. On the other hand, foreclosure petitions rose 22% in October, hitting 1,458 filings, compared to 1,193 last year.
Tim Warren with The Warren Group warns that “[f]oreclosure starts are often a leading indicator and the increases could be a cause for concern.”
Massachusetts foreclosure auction announcements also declined 34.7% to 901 filings in October when compared to 1,380 a year earlier.