Foreclosures in Boston nearly tripled in the first quarter, with owners of multifamily homes feeling the brunt of it.
A total of 306 properties were foreclosed in Boston, up from 109 in the first three months of 2007, according to statistics from The Warren Group, parent company of Banker & Tradesman. The bulk of the foreclosures, 171, occurred in Dorchester. Roxbury had the second-highest number, with 31 taking place from January through March.
Forty-three percent of the Hub’s foreclosures, or 131, involved two- and three-family homes, while 40.5 percent involved condos.
“We are very alarmed by this issue,” said Gail Latimore, executive director of Codman Square Neighborhood Development Corp., a Dorchester group that offers foreclosure prevention counseling. Latimore said every other street in the neighborhood her group serves either has a foreclosed property or a home at risk of foreclosure.
Community groups fear the problem will grow as the economy continues to struggle and interest rates on adjustable-rate mortgages reset, forcing homeowners to make higher monthly payments.
Many homeowners who could have hung onto their properties will be forced into foreclosure because of rising costs for everything from fuel to food, said William A. Minkle, interim executive director of Ensuring Stability through Action in our Community (ESAC), a Jamaica Plain-based agency.
“I think people need to understand the gravity of the situation and how serious it is,” said Minkle. “One of the things that we’re concerned about Â… is to save these neighborhoods so the tenants don’t get evicted.”
The city of Boston has worked to prevent foreclosures, and to target neighborhoods with vacant and blighted properties. Mayor Thomas M. Menino assembled a team to acquire some abandoned properties in Dorchester, secure vacant homes and clean up streets.
In March, Menino announced that the city and the Real Estate Bar Association have partnered to offer free legal help to struggling homeowners.
Leaders in other cities, including Lowell and Worcester, also have tried to stem the tide of foreclosures.
Statewide, foreclosure activity more than doubled in the first quarter, The Warren Group reported last week. There were 2,827 foreclosures from January through March, a 138 percent increase from 1,186 a year earlier.
‘A Tough Period’
Dorchester has been one of the hardest-hit areas in Massachusetts. A total of 171 Dorchester properties were seized through foreclosure, more than triple the amount during the first three months of last year. More than half of the foreclosures in that neighborhood, 90, involved two- and three-family homes. Sixty-six condo owners were foreclosed on during that time.
“We are seeing houses that are being abandoned and being boarded up, which are an eyesore and which become big targets of vandalism,” said Latimore.
Latimore said the Codman Square Neighborhood Development Corp. has served more than 200 owners facing foreclosure since last July. “That’s more than we served in the previous 10 years,” she said.
The group has stepped up its efforts to reach out to homeowners with subprime and adjustable-rate mortgages who will see their monthly mortgage payments mushroom over the next three months. It is launching an advertising campaign on radio stations and newspapers to make people aware of its counseling services.
Roxbury had 31 foreclosures in the first quarter, up from seven a year earlier. Seventeen involved condo owners.
“A concern that we have is Â… the fact that this is just the beginning of what is going to be a tough period for all of us,” said Lionel Romain, director of homeownership services at Roxbury-based Nuestra Comunidad Development Corp.
Romain said homeowners are using credit cards and retirement savings to keep up with mortgage payments. “People are using other sources to fund their mortgage payment that are not sustainable in the long run,” he said.
Nuestra Comunidad counseled 92 owners last year. The group was able to modify loan terms for 16, and helped seven refinance their loans. Six homeowners sold their properties. Thirteen withdrew from the counseling, and 10 weren’t responsive to Nuestra’s offer for help. Three had their properties foreclosed.
Many homeowners who try to reach out to mortgage servicers before they fall behind on payments aren’t successful, according to Romain.
“A lot of [lenders] don’t listen to clients when they say, ‘I’m current now but I’m going to be delinquent in a few months when the payments increase,'” he said.
Next to Dorchester and Roxbury, Roslindale and East Boston had the most foreclosures in the first quarter. Twenty-two properties were foreclosed on in Roslindale, up from six a year earlier. East Boston also saw 22 foreclosures, four times more than the same months in 2007.
Late last month, legislators proposed three bills that would put a six-month stop on foreclosures involving subprime mortgages, prevent evictions of tenants living in foreclosed properties and require judicial approval for each foreclosure. The bills are supported by the Massachusetts Alliance Against Predatory Lending, a coalition of community organization.
Minkle said ESAC counselors are working with homeowners who clearly didn’t understand the terms of loans they obtained. “The things that we’re seeing are just awful,” said Minkle, noting that some of the terms were “simply horrendous.”
Getting mortgage companies and servicers to agree to better loan terms for the borrower can be extremely difficult, according to counseling agencies. Minkle said it took ESAC nearly eight months to negotiate a deal with a lender to lower the interest rate on a client’s loan from about 11 percent to 5 percent.
“It was an incredible deal but our counselor had worked on it a long time,” Minkle said. “Some of those deals are getting done, but a lot aren’t,” he said.
About 90 homeowners sought help at ESAC in the last quarter. Roughly 35 of them were able to get a loan modification or refinance or some “other positive outcome” through ESAC, according to Minkle. The other cases either resulted in foreclosure or remain “open,” meaning that ESAC counselors are still trying to work out a deal for the owners.
More than 800 foreclosure petitions were filed against Boston properties from January through March. Petitions, filed in Massachusetts Land Court – located at 226 Causeway St. in Boston – are the first step in the foreclosure process. There were 868 petitions, up 43 percent from 605 a year earlier.
