3 Responses to “Weekly Boston Real Estate Sales and Listings Update, December 16, 2006” »»

1. Q
   Comment by Q | 12/18/06 at 11:48 am

   John,

   I had a conversation this weekend regarding the booming foreclosure rate in Mass.

   Now, the news is reporting that the amount of foreclosures has doubled in the past year. My

   question is if you or anyone else has information on the PERCENTAGE of foreclosures compared to the

   amount of loans. Wouldn’t that figure be far more relevant than the sheer number of foreclosures?

   Seems like there have been a lot more mortgages taken out recently which, I would think, would

   skew the numbers.

   This is just a random question that doesn’t really apply to this article

   but wasn’t sure where else to post it.

   I wanted to check foreclosures.com but it’s a pay

   site and I don’t need to see it THAT bad. :)

2. John A Keith
   Comment by John A Keith | 12/18/06 at 2:29 pm

   Hello.

   My understanding is that twice as many loans (originating and refinancing) were

   written in 2005 as were written in 2000.

   You are right, the percentage may be the more

   important number.

   However, I believe the percentage of loans that go into foreclosure have

   risen, as well as the raw numbers.

   If you look at some of the articles about this, however,

   just about all of them say that the percentage of loans going into foreclosure is historically low;

   I think it’s less than 2%, whereas the percentage has been in the 4-5% range, during economic

   hard-times in the past.

   Also, keep in mind that when a property is in “foreclosure” it

   doesn’t mean it was “foreclosed” upon. The sheriff didn’t show up and kick out the people. A

   property is considered entering into the foreclosure process when the loan payment is at least 30

   days past due. The bank files a form.

   The owners have the opportunity to bring the loan

   current, at any point prior to the court order, at the very end of the process.

   Percentages

   of people entering each stage of foreclosure have gone up, probably, but nowhere near what I’d

   consider a troublesome level or indicative of a problem.

   Naysayers will jump on this and

   say, “those who took out option ARMS, etc. will begin to have trouble paying their loans as their

   interest rates reset over the coming three years…that’s when you’ll see the large increases in

   foreclosures.”

   Maybe. I think just about anyone who can will refinance into a lower rate

   loan, if they can.

   People want to hold onto their homes. Just about everyone is going to

   do what they can to keep them. No one’s going to walk away, as long as they have a job and the

   chance to get a loan at 6%.

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