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

He was wrong.

The $550,000 that Lane’s home fetched at auction covered most of his $650,000 first mortgage, but none of his $200,000 second mortgage – and the second lender wants its money.

“I thought this was finally over, but it’s one of these things where there’s no end in sight,” said Lane, a 65-year-old biotech executive who fell on hard times after losing his job and coming down with cancer.

Massachusetts homeowners who’ve lost properties to the state’s foreclosure crisis are finding that their troubles don’t necessarily end when the auctioneer’s gavel falls.

That’s because foreclosure auctions in today’s weak housing market rarely net enough to pay off properties’ first mortgages, let alone any second liens.

Bay State consumers are often technically on the hook for any remaining balances under laws lenders haven’t traditionally enforced, but are beginning to employ more and more.

For instance, Bank of America keeps billing Lane for the $200,000 he owes on his second mortgage, plus some $10,000 in penalties and interest. The ex-homeowner also recently began getting a second set of bills from Dyck O’Neal, a Texas firm that buys bad debts on the cheap and tries to collect them.

“They want a quarter-of-a-million dollars from me, but I don’t have it and I don’t know how to get it unless I rob one of their banks,” Lane said.

Bank of America told the Herald in a statement that while it “always regards foreclosure as a last resort, (we) may ask third-party firms to try to collect unpaid balances in certain instances involving second mortgages.”

Most lenders have historically let such debts slide, figuring that people who’ve lost homes to foreclosure are broke.

But Andover bankruptcy lawyer Michael Feinman said post-foreclosure collections shot up when housing’s last bust ended in the mid-1990s, and he expects they’ll soon do so again.

“Once things settle down a bit, these debts will get sold off and there will be companies like Dyck O’Neal picking them up and chasing borrowers for them,” Feinman said.

Unfortunately for consumers, state law allows second-lien holders to go after some post-foreclosure debts for as long as 20 years. Firms can also go to court and get “deficiency judgments” good for a second 20 years.

With such judgments in hand, collectors can place liens against any future properties foreclosed homeowners buy, or even seek court orders garnishing debtors’ wages.

Typically, collection activities begin months or years after people have lost homes to foreclosure and moved on.

“It’s really upsetting to clients,” said Nadine Cohen of Greater Boston Legal Services, which provides free lawyers for the poor and has seen a handful of post-foreclosure cases so far. “People got outrageous subprime loans that they never could have afforded, lost their homes to foreclosure and then the second-mortgage companies come after them.”

Experts say consumers faced with such collections often end up declaring bankruptcy, sullying credit scores that had just begun recovering from the underlying foreclosures.

Even when lenders don’t try to collect unpaid second liens, merely having one on your credit report can disqualify you from future loans.

Just ask Annette White-Cole, who lost her Hyde Park house to foreclosure in 2006 after getting a subprime loan from a firm the state later sued for running a scam.

White-Cole has lived with relatives for three years, but patched up her credit, took a city-run home buyer’s class and now wants to buy a place again.

However, the 49-year-old can’t get financing because her credit file still lists her former home’s unpaid $80,000 second mortgage.

Unless loan servicer Green Tree – which didn’t respond to a request for comment – forgives White-Cole’s debt, the woman won’t qualify for a mortgage for years.

“These people have destroyed my life,” White-Cole said. “It’s like a nightmare that doesn’t end.”

“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.

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.

This week, there were 51 petitions and lis pendens, 1 auction, and 2 bank owned / REOs.

There were 10 petitions and lis pendens in Revere, 3 in Chelsea, and 38 in Boston. Boston had 1 in Allston, 1 in Brighton, 1 in the North End, 17 in Dorchester, 2 in East Boston, 3 in Hyde Park, 3 in Jamaica Plain, 2 in Mattapan, 2 in Roslindale, 3 in Roxbury, and 3 in Jamaica Plain.

Review the Foreclosure Listings here.

If you’re selling or buying a home, chances are you’ve noticed a change. In Massachusetts, that change is big.

Esmerelda Thornton is a homeowner counselor at the Neighborworks center of Worcester. Her job is to help people facing foreclosure and first-time homeowners perhaps looking to buy those foreclosed homes.

According to the Warren Group in a report-released Wednesday, Massachusetts single-family home sale prices have fallen nearly 16 percent from this time last year. It’s no surprise for realtor George Russell.

He’s says the foreclosure crisis not only in Worcester – but across the country – has changed the market completely. Essentially foreclosure sales with low-ticket prices have set the standard for any home sales in region.

While there is no overnight fix for the residential housing market, there are encouraging signs that the second half of 2009 could bode well for both buyers and sellers in Massachusetts, including MetroWest.

The evidence can be found between the lines, or, in this case, between the raw numbers that show the year-to-year declines in home sales and prices.

Standing alone, those numbers don’t make for great reading. Here are the figures for communities in MetroWest comparing 2007 with 2008:

City/town             Sales (percentage change) Prices (percentage change)
Ashland             -11%                                           -6%
Framingham    +7%                                            -18%
Holliston           -37%                                           -13%
Hopkinton         -28%                                           -4%
Natick                -19%                                           -6%
Sherborn          -2%                                             +14%
Southborough -21%                                           -3%
Sudbury            -20%                                           -11%
Wayland           -20%                                           -18%
Westborough  -14%                                           -12%
(Statistics come from BrokerMetrix)

While home sales in the Bay State dropped by 13 percent, from 66,422 in 2007 to 56,319 in 2008, some consolation can be found in the fact that it was the lowest percentage decline among the New England states, and home sales in Massachusetts dropped by the smallest margin compared to the other New England states. Average sales prices in Massachusetts dropped by nine percent, from $398,724 in 2007 to $363,102 in 2008.

But again, a truer picture of how the housing landscape shapes up for 2009 can be gained by looking more closely at two major elements:

Foreclosures.
This, of course, has been at the heart of the housing problem, and will continue to be a major factor, at least for the first half of 2009. The already-high foreclosure activity in the region will likely be pushed higher by rising unemployment, salary freezes, stock market losses and other consequences of the sputtering economy.

But there is a positive flip side: the foreclosures offer bargain opportunities for first-time home buyers. The affordable prices and near-historic low interest rates combine to create a momentum for buyers to gobble up this excess inventory.

It also bears mentioning that the areas of foreclosure activity are primarily larger urban centers.

Trading up.
The current market not only benefits first-time buyers; the math can work in favor of buyers looking to upgrade to a larger home, as well. Let’s say your home was valued at $250,000 six months ago, and now it’s appraised at $225,000, a 10 percent drop. But that bigger home down the street that was on the market for $300,000 a while ago has also declined in value by 10 percent, and can now be had for $270,000. So what would have cost you $50,000 more six months ago can be purchased for just $45,000 more.

By the end of 2009, the increased activity in first-time buyers and in investment buyers could significantly cut down the overall inventory and pave the way for an upturn. Additional incentives could also restore equilibrium.

For instance, a key component of a recovery would be congressional favorability toward a set of buyer-focused ideas proposed by the National Association of Realtors (NAR). One of NAR’s proposals is opening the $7,500 tax credit for first-time home buyers to all purchasers, and eliminating the current repayment requirement – effectively changing it from a loan to a grant.

In the meantime, it’s important to remember that down cycles – even one as severe as what we experienced in 2008 – are nothing new in the residential housing industry. But the fact is that even when the road seems the bumpiest, there are opportunities out there.

Beacon Hill Foreclosure Living Room

According to the listing, the property is totally livable now – it boasts +-1,550 SQFT , 2 bedrooms, 2 full bathrooms, central A/C, 2 gas fireplaces, storage, courtyard with private +-300 SQFT patio. There is a spacious, open floor plan.  The entry level has chef’s kitchen with granite counters, oak cabinetry and granite counters, with large island. There is also a flexible informal living and/or formal dining area as well.   An additional living room, guest room, and full bathare located on the second level. The master level has large bedroom, walk in closet with laundry, and spacious master bath with whirlpool tub and separate shower. Top level is currently unfinished with storage and has endless possibilities.  

There is a PDF floorplan of this Beacon Hill Foreclosure, available here and a virtual tour here.

• # of Bedrooms    * 2
• # of Bathooms    * 2
• List Price              *  $899,000
• Square Feet         *  1550 sq feet
• FY 2009 Taxes  * ~$9468

There are 6 more pictures after the jump; click below to see the rest of the photos.

You can contact Charlesgate Realty to learn more about the Beacon Hill Foreclosure located at 28R Phillips Street, Boston MA.

Buy Foreclosures With No Money Down

You’ve found the perfect foreclosure property to invest in. However, the problem is you don’t have enough saved for the down payment on the financing. You don’t want to miss the opportunity to purchase the property, so you must come up with some creative ways to make the down payment.

Do a search on the Internet and you will turn up an assortment of web sites that are helpful in financing your desire to buy foreclosures.  There are many books, websites, agencies, and seminars available today to help the investor purchase property with no money down.

One such site, Bankrate, offers assistance in buying foreclosed property with no money down. There are other alternatives as well to those who don’t have the money for a down payment. Other options include local or state programs that assist buyers, Veterans Affairs, owner financing or trading.

VA Foreclosures
VA loans are a popular option for many people.  These loans are available to active and retired military members, their unmarried widows and spouse of POW and MIA soldiers.   However, these foreclosure properties are no longer limited to veterans of a military branch. VA property can be purchased by anyone who is going to use the property as their primary residence. It cannot be used as a second home or vacation property. There is no maximum amount on the loan. For those who aren’t veterans or active military, they will have to apply for an FHA loan or conventional loan to finance the property. VA foreclosure listings can be found through banks and the federal government agencies.

Applying for a Loan
There are web sites online that offer to help you buy foreclosed homes with no money down. You apply for a loan application online. If you don’t have the money needed when you find a foreclosed property you want to purchase, do a search online for lenders who can help.

Owner financing
One possible option is the owner financing or a lease with option to purchase program. The market is filled with foreclosures right now so those owners the homes might be willing to assist a buyer to get their property sold before it is taken for missed payments. Lease with the option to purchase is often a good deal for both the seller and the buyer. The seller gets monthly payments to put towards his mortgage while the buyer can purchase the home with no money down.

Friends and Family
Another option is to borrow the money for the down payment from a friend or relative. To sweeten the deal for them, you could make them a silent investor in the deal by giving them a small percentage of the profits from the property.

There are many types of financing available to anyone wishing to buy foreclosure property.  It is possible to purchase foreclosures with no money down using creative financing.  The options above are just a few of the place you can look for creative finance opportunitys to buy a foreclosure.

You have decided to purchase a home through a foreclosure sale. One of the best ways is through bank foreclosures. Bank foreclosures are simply the homes and properties the bank has taken back from the original purchaser through foreclosure. The owners of the property have fallen behind in their payments forcing the bank to take back the home. These types of sales are often the safest and easiest ways to purchase foreclosure property.

You are dealing directly with the bank making bank foreclosures easy to buy. These banks want to sell the property since they don’t make any money on the property they own. Banks often advertise their properties for sale in newspaper classified ads or through a real estate service. You can often buy these foreclosure properties for about 10% to 15% lower than their market value. The process is simple and often a good option for beginning investors or first time buyers.

Another reason they are easy to purchase is the lack of judgments or liens on the property. You won’t have to worry about back taxes and tenants or the homeowners have already vacated the property so you won’t have to worry about evicting them. The bank allows you admission into the property for various inspections. As you can see, bank foreclosures have a lot of benefits.

Your financing should already be in place and ready to make a purchase before you begin your search for a foreclosure. Banks want to get rid of these properties quickly and usually won’t wait for you to get qualified in your financing.   Also keep in mind there are often other fees and rates involved on top of the discounted price needed to purchase the home.

You can sometimes negotiate when buying bank foreclosures. For instance, you might be able to negotiate a lower interest rate, lower down payment, discounted asking price or reduced closing costs. As the buyer you will have to ask for these things and they should be kept realistic. Many lenders are flexible and will work will with you to get a good deal.