Warren, MA 01083

3 Bd | 1 Ba | 2,304 Sq. Ft. | Single Family

Foreclosure Status: Foreclosure Auction (NFS)

County Worcester CountyType Single Family ResidenceBeds 3Baths 1Square Feet 2304Lot Size 18100

Just as all the hoopla over the extension of the home buyer tax credit starts to fade, along comes the The Mortgage Bankers Association to bring the market back to reality.

One in seven loans is now in foreclosure, up from one in ten at the start of the year. It’s the highest on record since the MBA began track this stuff in 1972.

And forget about all those goofy subprime loans. The driver now is the ever rising jobless rate, which has topped 10 percent and may top 11 percent or higher before it settles out.

Foreclosures on prime mortgages accounted for 33 percent of all foreclosures last quarter, up from 21 percent at the start of the year, the group reports.

The mortgage bankers project rising foreclosures well into 2010, not leveling off unitl the jobless rate starts to moderate.

And the local numbers don’t look much better, either.

The number of homes seized and sold by lenders, the last step in a months long process, has actually been on the decline so far this year in Massachusetts.

But the number of initial foreclosure notifications sent out by lenders kicking off the process is up, and up dramatically, according to local real estate data tracker the Warren Group, publisher of Banker & Tradesman.

Initial filings were up 11 percent in October over October 2008 and have risen 27 percent year to date.

Here again rising unemployment, not foolish subprime loans, appears to be driving the increase.

It certainly helps back up Rep. Barney Frank’s case that we need to start thinking about emergency loans to jobless homeowners.

And the foreclosure debate is clearly shifting now, from one about personal responsibility to the fallout of a brutal recession.

That’s my take. How about you?

“With the end of the year coming, the banks are going to dump a lot of stuff,” says Richard Zwick, a real estate agent from DeLand, Fla. “The prices will keep coming down and down as the banks are forced to take less and less.” In the area of central Florida Zwick covers, price tags on many foreclosed homes are as much as 50% lower than they would have been six months ago.

Before you start focusing your energy on finding a foreclosed home, here are a few ideas to keep in mind.

First off, try to get a sense of how many foreclosures there are in your area. Places like Phoenix, Las Vegas and central Florida are hot spots with massive inventories.

In contrast, foreclosure rates in many rural areas have barely gone up since the recession hit. And even if there are a number of foreclosures in the neighborhood you’ve got your eye on, factors such as high-quality schools could lead to hefty competition for each one.

Next, become familiar with the different categories of foreclosure sales. “Short sales” usually occur when homeowners are behind on their mortgages and their home is worth less than what is owed to the bank. The homeowner requests that the bank agree to a short sale in order to escape the overly burdensome payments without getting the blot on their credit record that a foreclosure would leave. Banks usually go along with these deals because they figure they will face smaller write-downs and fewer administrative costs than with a foreclosure. The catch with this type of sale is that the current homeowner’s mortgage lender, who gets to approve the new buyer, might take as long as two months to sign off on an offer.

“That gets very frustrating for those involved,” says Timothy Warren, head of a Boston firm that publishes information on foreclosure sales in the New England states.

Once a home is foreclosed on, it’s auctioned off at a public event. Most of the time it’s the lender of the original mortgage that buys the property. (That was the case 95% of the time in Massachusetts last year, according to Warren.) Why do individual buyers tend to stay away? At this point in the foreclosure process, the financially beleaguered original homeowner is often still living in the foreclosed property, which makes it extremely difficult to arrange a thorough property inspection. And when amateurs do try their luck at an auction, they tend to make rookie mistakes.

“Most people get so excited, they overbid,” Zwick says.

After the original mortgage lender purchases a foreclosed property, it typically puts it up for sale as-is. These sales are known as REOs, for “real-estate owned.” The thing to watch out for here is that banks are quick to yank a prospective buyer’s deposit for failing to strictly abide by deadlines.

“I’ve heard of people about to buy an REO losing their deposits because they don’t follow the inspection deadlines or the mortgage deadlines,” Zwick warns.

Another possibility, albeit a relatively remote one: key paperwork concerning your new REO’s previous mortgage was mislaid as investors traded it like a baseball card during the mortgage securitization boom. More and more state court judges have been ruling that such slip-ups create a reason to invalidate a foreclosure. That would jeopardize your claim to the foreclosed property you just purchased.

It’s tempting to believe you can navigate the foreclosure sale process on your own. Much of the information you need is public. The downside is that it can be difficult to track down, let alone do so fast enough to ensure you’re getting the jump on the competition. The petitions for foreclosure that precede a short sale often have to be dug out of courthouse record rooms.

Foreclosure auction information comes from hard-to-read-type in the back of major newspapers, or from subscription services like the one Warren operates. As for REOs, lenders tend to have favored networks of brokers they tip off about the best deals. The result? A DIY approach to buying a foreclosed home “is really not for the faint of heart, and requires a lot of patience,” Warren says. There are plenty of real estate agents who specialize in setting up buyers with foreclosed homes. Consider hiring one if you’re interested in the foreclosures market.

The address of this Cambridge Massachusetts Foreclosure is 10 Museum Way Unit: 526 Cambridge, MA 02141.

Cambridge Massachusetts Foreclosure

• Condo/Townhome/Row Home/Co-
• Community Name: Regatta
• Year Built: 1998
• 2 total bedroom(s)
• 2 total bath(s)

• 2 total full bath(s)
• 3 total rooms
• Approximately 1040 sq. ft.
• Type: Condo, Fifth floor location
• Style: High-rise

• 1 open parking space(s)
• Heating features: Central
• Central air conditioning
• Call agent for details on association fee info.

WBUR has a great report on the Massachusetts Foreclosure and Subprime Mortgage crisis.

BOSTON — Where were Massachusetts banking regulators as the subprime mortgage crisis exploded all around them? An investigation by the New England Center for Investigative Reporting found Massachusetts lags far behind other New England states in the number of serious disciplinary actions against mortgage brokers.

Jaime Alvarez has the face of a trusting man. The 57-year-old and father of two young children emigrated from Colombia 37 years ago. His warm smile is followed by a gentle handshake.

On a summer afternoon in Brighton, he is taking his kids — a boy and a girl — to a nearby park. He is out of work because of a back injury he suffered while doing some repair work on his home. Several steps up from the sidewalk where we’re standing is that Brighton home — one Alvarez can barely afford.

“At the beginning we had to figure out how to come up with the money for the mortgage. We didn’t know what to do. So we were living in one room with my kids and my wife and I–” Alvarez breaks down into tears.

Despite Alvarez’s family income of $38,000 a year, he obtained $580,000 worth of subprime loans that add up to yearly mortgage payment of almost $52,000 a year.

“We are both from the same country and he was treating me like a member of his family,” Alvarez says of Mauricio Osorno, the owner of Your Home Mortgage in Chelsea. “I trust him, right from the beginning. I trust him completely.”

Alvarez says Osorno never explained the terms of the mortgages. Alvarez says he was forced to take in boarders to meet his monthly payment.

Allegations Of Unfair Practices In Mortgage Lending Arise

The mortgage broker Alvarez used — Your Home Mortgage — is now the subject of a Greater Boston Legal Services lawsuit alleging unfair and deceptive practices and discrimination. The company was also the subject of two complaints sent to the state Division of Banks that regulates mortgage brokers and lenders.

“I think there was a lot more that probably could have been done at the time,” says Legal Services attorney Nadine Cohen.

Cohen is specifically referring to what happened when a nonprofit foreclosure prevention specialist filed two complaints with the state division of banks about Your Home Mortgage. In one letter on behalf of Alvarez, she wrote to the division saying that Alvarez’s mortgages appear to be based on “no income verification.”

The Division of Banks wrote back saying it did not see anything wrong with what Your Home Mortgage had done.

“I felt like a mountain came over me,” Alvarez says. “I was hoping that I was going to get some help, but it never happened.”

Mauricio Osorno, who, with his brother Diego, runs Your Home Mortgage, would not talk about the lawsuit or complaints against their company, except to say they deny the allegations.

The Osornos also have a companion real estate company called Su Casa y Más. As part of our investigation, we found that nearly 50 percent of the residential sales Su Casa has been involved in — representing the buyer and seller — since 2005 ended up in some stage of foreclosure. The average foreclosure rate for residential properties in Massachusetts is about 9 percent.

Where Were The Regulators?

Over the past two and a half years, as the predatory lending crisis was exploding, the Massachusetts Division of Banks issued 43 serious disciplinary actions — suspensions or revocations or forced license surrenders — against mortgage brokers and lenders. That is slightly less than three percent of the companies it licenses, and it puts Massachusetts dead last compared to every other state in New England and below North Carolina, which has a similar number of brokers.

“Anytime you hear that Massachusets is well below national averages or well below where other states are in terms of enforcement actions or cracking down on behavior that we want to crack down on, it’s a concern,” says Tom Callahan, director of the Massachusetts Alliance for Affordable Housing.

“I think we have an excellent record of taking action when we’ve found a problem and in keeping people out of the business so they won’t perpetrate this fraud.” says Division of Banks Chief Operating Officer David Cotney.

Cotney argues the division’s 210 informal actions, the details of which are not made public, have prevented more serious mortgage abuses. The division also sees itself as leading the way in policy initiatives to reform the mortgage industry.

More Investigators, But Less Disciplinary Action

Our investigation found that Massachusetts has more than double the number of investigators compared to all of the other states we surveyed, but it might not be enough.

A 2007 state audit cited a need for more aggressive enforcement by the state division of banks. The audit said the agency’s “capacity to perform examinations (of mortgage brokers) has not kept pace with the increase in the number of mortgage lenders and brokers under its authority.”

“Maybe the Division of Banks wasn’t nimble enough to switch and pull resources from the banking, the credit union world and say ‘our major concern has got to be the mortgage companies,” Callahan says.

In response to the state audit, the Divison of Banks successfully lobbied the legislature for funding to hire more examiners. But despite that extra manpower, the number of examinations of mortgage brokers and lenders dropped by 74 between 2006 and 2008. not until 2008 did the agency set up a special unit to investigate mortgage fraud.

In the meantime, the number of foreclosures in Massachusetts more than doubled.

While Massachusetts — compared to the other states we looked at — ranks last in the number of serious enforcement actions, it ranks second in its foreclosure rate.

So why didn’t the division of banks take action when it received complaints about your home mortgage, the company that gave Jaime Alvarez his subprime loans?

“I’m not familiar with this particular issue but what I can tell you is we don’t just have a policy of saying these are bad acts or practices, we actually do have a track record.” says David Cotney.

That was Cotney’s answer to practically every one of our questions: the Division of Banks has a track record that it is proud of.

When we asked about the depth, severity and impact of the subprime crisis in Massachusetts, Cotney — the chief operating officer at the Division of Banks — did not have an answer.

“What troubles me most is that poor, unsophisticated, often non-English speaking people put their hard earned money into buying a house and really tried their best to make their payment, but they were doomed from the beginning,” says Cohen, the Legal Services attorney.

The experts we interviewed for this story say those families are not the only victims — all of us are paying the price for a lack of aggressive enforcement of the mortgage industry.

In the midst of the worst mortgage crisis in recent history, at a time when foreclosures are still on the rise, the state Division of Banks’ record is this: only 43 serious disciplinary actions over two and a half years, the worst record in New England.

Jamie Lutz, Lyle Moran, Christie, Molly Connors, Nina Cromeyer, Ben Ezickson, Sydney Lupkin, Dan Rosinski, Lauren Winowich and Maggie Mulvihill, co-director of the New England Center for Investigative Reporting, contributed to this report.

In late March of this year in the case of U.S. Bank v. Ibanez, Massachusetts Land Court Judge Keith C. Long issued one of the most controversial rulings in recent years which has called into question hundreds if not thousands of foreclosure titles across Massachusetts.

The Facts

In the Ibanez case, the Land Court invalidated two foreclosure sales because the foreclosing lenders failed to show proof they held ownership of the foreclosed mortgages through valid assignments. In modern securitized mortgage lending practices, the ownership of a mortgage loan may be divided and freely transferred numerous times on the lenders’ books. But the documentation (i.e., the assignments) actually on file at the Registry of Deeds often lags far behind. The Land Court ruled that foreclosures were invalid when the lender failed to bring the ownership documentation (the assignments) up-to-date until after the foreclosure sale had already taken place.

The Ibanez decision has called into serious question the validity of any pending or completed foreclosure where the lender did not physically hold the proper paperwork at the time it conducted its auction. The mortgage industry has criticized the decision as form over substance. The judge is presently reconsidering the ruling, but whatever the outcome, the case will likely end up before the Massachusetts Supreme Judicial Court given its far-ranging impact.

What can you if you are affected by the Ibanez ruling? If you are a homeowner facing foreclosure, you now have a powerful tool to delay or stop the foreclosure sale. Check the Registry of Deeds online to see if your lender has timely recorded the proper assignments, and send a written request for the loan documents. It may be confusing to piece together the chain of custody of your mortgage. If the foreclosure auction has already taken place and you are being evicted, you can request the loan documents in written “discovery requests” filed with the court. You could also file a lawsuit to enjoin the foreclosure.

If you are contemplating purchasing a property out of foreclosure or are selling a previously foreclosed property affected by an “Ibanez” issue, check if there’s an existing title insurance policy on the property, and ask the title company to insure over the issue. Some are willing to do this. Others are not, however. The other option (albeit expensive) is to hire an attorney to file a Land Court “quiet title” action to validate the proper assignment of the mortgage loan, assuming you can track the documents down and they were not backdated. You can also try to track down the foreclosed debtor and obtain a release deed from them, assuming you can track them down and they cooperate.

If you are facing foreclosure and need help getting through the legal paperwork maze, contact City Life/Vida Urbana. They are Boston based. Other efforts are starting up all over eastern Massachusetts, too.

If you are buying foreclosed property, get a lawyer, please! (I know you all hate it when lawyers tell you to get a lawyer, but this is a time when you really need one.)

Ibanez is going to make foreclosure slower and more complicated. But, it may also force lenders into doing things right.

Have you ever read your mortgage documents? If you haven’t, pull them out of that dusty old box and take a look. There is a process; lenders need to follow it. If they don’t, the next person buying the house may not have proper title. Remember that you never buy a house; you buy a title.

Are we headed for a paperwork mess of mammoth proportions? Will Ibanez keep it manageable?

There’s a lot of confusion out there about the foreclosure crisis.

I remember editors at one paper I worked for seeking in vain a suburban counterpart of battered, boarded up and foreclosed Hendry Street in Dorchester.

Anyway, I am sure there was a lot of salivating over potential headlines, Wellesley’s Foreclosure Alley and things of that sort.

Of course, it turned out to be the El Dorado of foreclosure stories.

The fact is, you are not going to find a bunch of Hendry streets out in the suburbs, especially in towns like Wellesley and Weston, where foreclosures, while hardly unknown, are not a huge problem.

Anyway, I remember trying to explain in vain the idea, that, at least here in Massachusetts, the vast majority of foreclosures are taking place in low income areas that were flooded during the boom with crazy, high-risk subprime loans.

I might have better luck had I been able to roll out this nifty, new graphic just released by the Boston Fed detailing foreclosure trends in Massachusetts since 1990.

The new graphic highlights low-income towns and cities on a map of the state. Then it superimposes foreclosure trends on top of these.

Walk through the graphic year by year and you will steadily watch low income areas, from Boston neighborhoods like Dorchester and Mattapan to Brockton, steadily filing with color to signify rising foreclosure rates.

The map quickly fills in around such low-income zip codes during the real estate collapse of the early 1990s, when a similar frenzy of suspect lending yielded a bumper crop of foreclosures in poor neighborhoods. The map steadily drains of color from the mid-1990s until 2007, when foreclosure rates start to spike again.

Then a similar, but even more intense pattern emerges on the map as foreclosures mount again in 2007 and 2008 – apparently there’s no data yet to plug in for 2009.

Anyway, it’s definitely worth checking out.

Source: Boston Globe

North Shore Music Theatre closed in June due to mounting financial problems. David Fellows, chairman of the NSMT Board of Trustees said the board of trustees has turned the property and assets over to Citizens Bank, which is in the process of foreclosing on the theater’s two mortgages, which total about $5.2 million.  The theater also owes another $5 million to subscribers and vendors, but that is unsecured debt that won’t be repaid unless the auction sale nets enough money, Fellows said.  Boston Culinary Group, which ran the theater’s food service, also has a $250,000 attachment on the property for unpaid bills.

Daniel P. McLaughlin and Co. Auctioneers says the auction is scheduled for Oct. 1 at 1 p.m. at the Dunham Road theater. Nobody at McLaughlin could be reached for comment.

The property and assets of the North Shore Music Theatre will be auctioned off to the highest bidder at an upcoming foreclosure auction, according to the theater’s former chairman.

The assets include three buildings — a theater-in-the-round, a restaurant and an education building — on 24 acres on Dunham Road alongside Route 128. There are also costumes, lighting, sound equipment and five vehicles, Fellows said.

The property is assessed at about $12 million, according to the city’s online records. Fellows said the theater’s total debts are in the $11 million to $12 million range.

Massachusetts Foreclosures

PEABODY — As foreclosures continue to rise across the country, activity on the North Shore has fluctuated depending upon the community.

As it did last year, Peabody had 30 recorded foreclosures through the first five months of this year. Foreclosures also held steady in Danvers, increasing by just one to 10 during the same span in 2009, according to The Warren Group, an organization that tracks the performance of New England’s real estate market.

Foreclosures fell by more than 50 percent to eight in Beverly. Salem, meanwhile, saw a 30 percent increase, jumping from 27 last year to 35 in 2009.

“(Foreclosures) haven’t gone away,” Warren Group CEO Tim Warren said.

The statewide picture appears rosier than what has been happening on the North Shore. Foreclosures in Massachusetts fell by nearly 60 percent this May compared to last May. The number of foreclosure deeds recorded (582) in May, the last month for which the Warren Group has data, was the lowest since April 2007. Year-to-date foreclosure deeds fell 26.3 percent to 4,110 from 5,576.

Nationwide, however, the number of households on the verge of losing their homes increased by nearly 15 percent in the first half of the year.

Foreclosure filings rose more than 33 percent in June compared with the same month last year and were up nearly 5 percent from May, according to RealtyTrac, a foreclosure listing service. The increases offered evidence that the Obama administration’s plan to encourage the lending industry to prevent foreclosures by handing out $50 billion in subsidies has yet to put a dent in the problem.

But banks and lenders are taking some steps to mitigate the crisis locally because foreclosures have not been flooding the real estate market, said Julianna Tache of Tache Real Estate in Peabody. The volume of properties for sale has been kept down as a result, creating a favorable environment for sellers, Tache said.

The demand for properties, coupled with incentives such as low interest rates and tax credits for first-time buyers, has recently generated multiple bids on homes that would have previously sat on the market for months without an offer, Tache said.

She is optimistic about the market, but conscious of the unpredictability of the current economy.

“If anybody can tell you they know how the market is going to pan out, they’re lying,” Tache said, quoting an expert she heard at a recent real estate conference.

A harbinger of continued trouble is the rising unemployment rate.

In Massachusetts, it increased to 8.6 percent in June.

“I have to think,” Warren said, “that the problems people are having paying their mortgages aren’t going away.”

Material from The Associated Press was used in this report.

Source: SalemNews

• Find a specialist. Check newspaper and online ads to see which agents handle REOs. Typically, banks have just a handful of brokers handling all of their local foreclosure sales.
• Get loan pre-approval.  The really good deals on REOs go quickly, and the buyer doesn’t necessarily have time to try to work out the financing afterward.  So, experts recommend getting pre-approved for a mortgage before even looking at foreclosed properties.
• Study “comps.” How do you decide how much money to offer for a foreclosure?  Simple: The same way you determine how much to offer in traditional transactions – by checking “comps.”  “Comps” are the prices that comparable listings in the same neighborhood recently sold for.
• Also look at how quickly nearby foreclosures have been selling.  The best advice on a bank-owned property is to come in at your highest and best, unless the property has been sitting on the market forever with no activity.

Remember that REOs are sold “as is.” Don’t expect the bank to cut its price to compensate for any repairs that a foreclosed home requires.

After all, banks base list prices on how much nearby foreclosures recently sold for – and those properties probably needed work, too.