The Roslindale area saw the highest increase in foreclosures of any neighborhood in Boston between 2007 and 2008, according to the City of Boston report Foreclosure Trends 2008.
It looks like those numbers will be down in 2009, but the number of foreclosure petitions—the first step in foreclosure proceedings—looks likely to rise this year. That could be a sign of what experts describe as a recession-fueled expansion of the foreclosure crisis into the prime foreclosure market.
While foreclosures in the neighborhood remain much lower than in other neighborhoods harder hit by the foreclosure crisis, like Roxbury, Dorchester, Mattapan and Hyde Park, foreclosures more than doubled in 2008, to 77 from 31 the previous year.
Other neighborhoods have consistently seen hundreds of foreclosures a year in recent years, according to the city report.
And it looks like there will be fewer foreclosures than last year in Roslindale by the end of 2009. There have only been 33 foreclosures so far this year, according to The Warren Group, a regional real estate tracking firm that publishes the Banker & Tradesman.
The Warren Group has slightly different numbers for the neighborhood because it uses a different neighborhood map for the city. Those numbers—for the 02131 ZIP Code—indicate there were 34 foreclosures in Roslindale in 2007 and 77 in 2008. Neither map is entirely accurate.
The neighborhood has seen an increase in foreclosure petitions, up from 108 last year to 111 so far this year, according to Warren Group numbers. Foreclosure petitions are generally filed after homeowners have not made mortgage payments for 90 days and have defaulted on their mortgages. There is generally a period of months between the filing of a foreclosure position and the filing of a foreclosure deed—the bank repossession of a mortgagee’s house. With 111 already, Roslindale is on track to see about 130 foreclosure petitions this year, close to the 135 petitions filed for residential property in the neighborhood in 2007.
The increase in foreclosure petitions and decrease in actual foreclosures was not surprising to any real estate trend watchers the Gazette spoke to. Generally, they said, the recession is causing an increase in mortgage defaults among people who have traditional mortgages but who may have lost jobs and be struggling to make ends meet.
At the same time, the shear numbers of foreclosed properties and encouragement from city, state and federal government are making renegotiation and refinancing an increasingly attractive option for lenders. The dip in foreclosure petitions last year was seen citywide, and came in the wake of a state law allowing home-owners in default an additional 90 days before petitions can be filed. [See “Foreclosures are few in JP” in this issue.]
Everyone does not see eye-to-eye on what the fluctuations in Roslindale’s foreclosure numbers mean for the neighborhood.
Steve Meacham, an organizer with the housing advocacy group City Life/Vida Urbana—which has worked with Roslindale tenants in foreclosed buildings to help them buy their homes from banks—said he does not see a fundamental difference between the sub-prime crisis and the broader recession-motivated foreclosure crisis.
“Although people are saying the reason for the foreclosure crisis is shifting to what they call life events—layoffs rather than predatory loans—we see predatory loans as anything gotten at an inflated value. The inflated values were created by a bubble caused by these bank instruments [sub prime loans],” he said.
Since the prices people bought their homes at were caused by the real estate bubble, the mortgages they took out were inflated and they are the victims of predatory lending, Meacham said.
Linda Burnett, a Roslindale Realtor of 20 years, said that housing market prices in Roslindale have settled at about 5 to 7 percent lower than 2005 prices—about the same as citywide.
“I am not a data analyst, but there are buyers waiting in line for single-family homes in Roslindale,” she said.
Burnett, who works for Keller Williams Realty, said she is seeing the results of sub-prime loans being less available these days. “People who are looking are completely qualified. They don’t have to go for any strange types of loans,” she said.
But, while they were both talking about Roslindale, Burnett and Meacham were talking about two different parts of the market. City Life mostly works with tenants in foreclosed investor-owned multi-family homes while Burnett said she was only talking about single-family homes.
Burnett did say that she has been involved in a few “short sales” of single-family homes. Short sales are when home owners facing foreclosure sell their houses for less than they are worth in order to settle their debt. They are a common tactic for avoiding foreclosure.
Burnett said she has worked on two short sales, one as a listing agent and one representing a buyer. Both closed on time, she said. Foreclosures on single-family residences have consistently been a large part of the Roslindale foreclosure picture.
So far this year, according to Warren Group numbers, they have accounted for 37 out of 111 foreclosure petitions, and 12 of 33 foreclosures. Multi-family homes have seen 43 petitions and 10 foreclosures, and condos, 31 petitions and 11 foreclosures.