The Massachusetts Land Court is under water, completely swamped by the deluge of foreclosure paperwork. And that backup is changing the way lenders do business, leaving embattled homeowners in their houses longer, and driving lawyers to file foreclosures in the state’s Superior Courts, trying to get things done.

The foreclosure process is now taking on average three months longer than it did just two years ago.

From the time when lenders filed a petition to foreclose in Massachusetts Land Court to when the bank filed the foreclosure deed at the Registry of Deeds in 2006, the process took an average of 253 days. By 2008, it was 342 days.

The simple, and grim, truth is there are so many foreclosures that the state’s employees can barely keep up.

“The combination of the volume and the lack of staff are creating a longer period of time within which these cases are processed,” said Deborah Patterson, Massachusetts Land Court’s recorder. “We are in a hiring freeze, and have been for a while now. People are gone, and we’re not able to replace them. It just is what it is.”

The backlog has led lawyers to file their foreclosures in local Superior Courts, straying from the comfortable uniformity of the Land Court, in an effort to expedite the process.

Arthur Brecher, a partner at Brecher, Wyner, Simons, Fox and Bolan, LLT, said while the Superior Courts are probably quicker, each county does things differently, and lawyers are subject to “the whims of the county clerks” instead of the reliable, and creaky, machinery of the Land Court.

“That’s the risk that you take,” said Brecher. “But if someone is a practitioner and is well known in the county, then maybe you can get things done quicker with the clerk, instead of petitioning the Land Court, where who knows how long it will take.”

Foreclosure Fallout

With everything taking longer, lenders have negotiated new pay structures with lawyers filing foreclosure petitions in the state.

“Before, a lot of them would do an hourly rate on these things, or pay a certain amount of dollars for certain milestones, and now they’re paying a flat fee,” Brecher said.

Brecher said lenders have started negotiating loan modifications more often, realizing that a return of any portion of what they’re owed is better than nothing.

But even if loans aren’t modified, it takes mortgage servicers a while to figure out who owns what.

Dan Crane, the state’s undersecretary of consumer affairs and business regulation, said there are too many masters behind mortgages for debt to be settled quickly.

“The slicing and dicing involved in securitization has caused the lenders taking more time before the servicer knows who the mortgage belongs to,” Crane said.

Crane said lenders also aren’t reporting to the Registry of Deeds as quickly, which is where Banker & Tradesman gets its information, often waiting until they have a buyer out of REO. There is no law requiring lenders to record deeds quickly; they do, however, have to notify the Division of Banks.

Under Siege

Crane said that other, ancillary actors in the foreclosure process are also overwhelmed, like lawyers, appraisers and auctioneers.

It’s unlikely that even the Superior Court can stop that.

“It’s going to get worse,” Brecher said. “There is just no personnel at the Land Court to handle it, and there is no budget to make it better. The same thing is going to happen in the Superior Court, too.

Foreclosure petitions rose from 19,112 in 2006 to 29,572 in 2007, according to The Warren Group, publisher of Banker & Tradesman. Petitions dropped to 21,804 in 2008, showing the “90-day right-to-cure” law has had some effect to curb foreclosures.

The lag, however, cannot be attributed to effects of the new law. It was passed in May 2008, requiring lenders to work with homeowners for 90 days before filing for foreclosure on their house. But the 90-days-to-cure come before the lender petitions the Land Court, so that time isn’t factored into the three-month increase in the process.

Foreclosure deeds recorded have continued to increase, however, rising from 3,130 in 2006 to 7,653 in 2007. That number significantly increased again in 2008, to 12,430, or 62 percent.