Clip: 2014 Foreclosure Glut Due To Past Bad Loans

An in-depth analysis of how an apparent increase in the number of foreclosures across the state was not quite the ill omen it might have seemed on the surface for the local real estate market.

[A] look behind the surface statistics reveals that the while the Bay State may still be being battered by foreclosures, in reality, it’s continuing to weather the same old storm: Loans from the mid-2000s, when lending standards were loosened and home sales boomed, make up the vast majority of distressed properties today. Of the more than 13,000 properties which were in some stage of the foreclosure process in 2014, more than 75 percent had mortgages originated between 2003 and 2008. (The Bay State housing market peaked in the fall of 2005, while the financial crisis of September 2008 marked the beginning of the nationwide housing crash.)

Post-crash loans, the bulk of which were issued under much tougher underwriting standards, made up only 13.8 percent of the loans in some stage of foreclosure proceedings in 2014. (The remainder of the distressed properties, or 9.5 percent, had loans originated prior to 2003.)

PDF of full article: Foreclosure Glut

Link to article (paywalled):

Banker & Tradesman, Feb. 15, 2015.

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