Brockton MA Has Most Foreclosures in Massachusetts

The city had the highest number of housing units in foreclosure in the state as of July, according to the Massachusetts Housing Partnership and the Federal Reserve.

A total of 34,794 housing units (including apartments) were in some stage of foreclosure. That number is actually down 1 percent since October 2008, and represents 2,900 properties, said Janine Carreiro of Brockton Interfaith Community.

“I’m not surprised,” said Carreiro.

She said for every 1,000 Brockton houses, 43.8 are considered distressed, or in some stage of foreclosure. The 02301 and 02 zip codes of Brockton have the highest foreclosure rates in Massachusetts, according to Carreiro.

“That’s why we’re getting federal money. They realize the problems,” said Mayor James E. Harrington.

Foreclosures can stem from predatory, or deceptive, lending, as well as owners’ job loss.

Housing specialists say federal programs designed to help have only recently made it into the city. Some are yet to be realized. Much of the money is designated to cleaning up blighted neighborhoods instead of helping homeowners keep their houses.

Donald Walsh, president and CEO of Building a Better Brockton Corp., the agency that administers federal housing funds, said that the prevalence of subprime lenders and unemployment in Brockton, as well as a lack of preparedness, put the city on the top of the list.

“I think part of Brockton’s problem is they did not have the organizational infrastructure to deal with the problems of foreclosure,” said Walsh.

Brockton received $2.1 million in federal Neighborhood Stabilization Funds and another $1 million from the state to buy and rehab foreclosed houses. The city also recently applied for another $21 million from the second round of Neighborhood Stabilization Funds.

“We’ve just started putting money out there,” he said.

Other federal funds are available to directly help borrowers bring mortgages down to 31 percent of their monthly income.

Brian Moriarty of Neighborhood Housing Services said lenders weren’t prepared to deal with the program when it was launched in March, but now, it’s beginning to work.

Neighborhood Housing Services provides foreclosure clinics every two weeks. Twenty to 25 property owners attend each program and many find solutions to prevent foreclosure. Moriarty said the success rate is now 65 percent, up from an initial 2 percent rate.

“Anything that prevents foreclosure is called positive,” he said.

Some loans are modified to a reasonable rate for the borrower, other times owners are led to a short sale — selling below the cost of the mortgage, which is not the best solution, but still considered a plus.

“Brockton was a targeted area for predatory loans,” he said. “We’re still seeing a lot of them.”

People saw Brockton as an escape from Boston — it was close by and had good schools, said Thomas Minichiello, Ward 1 school committeeman and an attorney specializing in housing.

“A lot of brokers and mortgage people marketed Brockton aggressively,” he said. “And, a lot of mortgagers turned a blind eye to tradition.”

So-called “boutique mortgages,” eventually failed because personal incomes did not keep up with escalating rates. Even some of the rescue programs aren’t realistic, because they don’t take loss of income into consideration, said Minichiello.

Often, people are paying 21/2 weeks pay toward their mortgage when the rule of thumb was always one week’s pay for housing, he said.

Unfortunately, most say the turning point is not yet on the horizon.

“It’s going to be a while,” said Moriarty. “A lot depends on how the economy goes, when people get that second job back and are not facing layoffs.”

For more information, visit mhp.net/foreclosuremonitor

Source: EnterpriseNews

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