The dramatic drop might be a result of lenders just holding off instead of a sign that the housing crisis is ending.
SPRINGFIELD – Foreclosure numbers are down drastically locally and statewide, but it might be that lenders are just holding off instead of a sign that the housing crisis is ending.
“Nothing has changed in the game. The players are still the same,” said Deborah L. Broaden, director of home ownership programs for HAP Housing Inc. in Springfield and head of the Western Massachusetts Foreclosure Prevention Center operated by HAP Housing.
But Broaden said fewer people have been calling the center fearful of losing their homes in the past few months, which she takes as a hopeful sign.
There were 58 foreclosure deeds filed in Springfield during the first five months of 2011, according to statistics released Thursday by The Warren Group, a Boston-based compiler of real estate data and publishers of Banker & Tradesman newspaper.
Those 58 represented an 81.59 percent drop from the 315 foreclosure deeds field in the first five months of 2010, also according to The Warren Group.
Foreclosure deeds are typically the last step in the mortgage foreclosure process, coming after an initial petition and an auction.
For Hampden County as a whole, the number of foreclosure deeds filed fell 79.8 percent from 540 in the first five months of 2010 to 109 in the first five months of this year.
In Hampshire County, the number of foreclosure deeds filed fell 57.33 percent from 75 in the first five months of 2010 to 32 foreclosure deeds filed in the first five months of this year.
In Franklin County, foreclosure deeds fell 43.28 percent from 67 in the first five months of 2010 to 38 this year.
Statewide, the number of foreclosure deeds fell 58.06 percent from 6,118 in 2010 to 2,566 in the first five months of this year.
Broaden said lenders are not following through on foreclosures out of fear that they’ll lose a court case and because the market for homes is slow and lenders don’t know if they’ll be able to turn around and sell the property.
That leaves many homeowners neither here nor there, Broaden said. The foreclosure auction has been indefinitely postponed. But many have trouble trying to catch up on their payments even with the extra time.
“There are many homeowners right now who have reached the end of that road,” Broaden said. “They are thinking they are living rent free until the final shoe drops. They’ll just save as much money as they can until someone tells them to leave.”
Homeowners facing foreclosure whose homes were also damaged by the June 1 tornadoes now have a 90-day automatic stay under federal emergency management rules, Broaden said. But that leaves homeowners deciding if they can afford to rebuild and catch up on their payments of it their only choice is to walk away. “The lender will come back eventually and reschedule that auction date,” Broaden said.