Byline: Christie Smythe
Dec. 13--Record numbers of mortgage holders on Cape Cod and the rest of the state are in jeopardy of losing their homes, according to a report by information service ForeclosuresMass.com.
In an analysis released yesterday, the company reported 838 foreclosure filings in Barnstable County from Nov. 1, 2005, to Oct. 31, nearly double the previous 12 months.
Statewide, there were 17,167 foreclosure filings during the same period, up 54 percent from the previous 12 months.
Cape Cod experienced the sharpest countywide increase across the state, according to the report. The towns of Sandwich, Bourne and Mashpee showed particularly severe spikes, all having more than twice the number of foreclosures so far this year as they had last year, according to ForeclosuresMass.
This year "has been a very unhappy year for thousands of Massachusetts homeowners, and as the holidays approach, we are seeing a massive increase in foreclosure filings," Jeremy Shapiro, president of ForeclosuresMass, said in a statement.
ForeclosuresMass gathers filing information from Massachusetts Land Court and sells it to investors, real estate professionals and mortgage brokers.
The numbers reported by the company indicate foreclosures that have been initiated. Actual numbers of repossessed properties are likely lower because homeowners can work out deals with their lenders or find other ways to stop the process.
The spike in foreclosures on the Cape may be particularly high because of the region's disparity between home prices and incomes, said Nancy Davison, vice president of operations for Housing Assistance Corp., which counsels people facing foreclosure. The Hyannis nonprofit estimates the Cape's median home price at about $362,000 and the median income for a family of four at $65,800.
Industry analysts have blamed a recent proliferation of "exotic" mortgages -- those with adjustable interest rates or temporarily low "teaser" payments -- for an nationwide upswing in foreclosures over the past year.
But Davison said the people who seek help from Housing Assistance Corp. do not always have exotic mortgages. Rather, they often simply cannot afford their payments after a sudden decrease in their family's income.
"I can't say the exotic is completely out of the picture, but it's not the driving force," she said. "There is just no wiggle room."
Davison said that many of the borrowers facing foreclosure received mortgages from large, national mortgage companies, not local banks. That suggests the large mortgage companies may have been less careful about whom they chose to approve for a loan, and may have helped many people on the Cape get into houses they could not afford, she said.
"It would make sense that the buyers would go to those lenders," Davison said. "They seem too good to be true. And they are."
Charles Dowick, an East Falmouth real estate investor, said he receives about five calls a week from people facing foreclosure.
In many cases, he said, the callers have taken a hit to their incomes because of a prolonged illness, a car accident or another unforeseen problem, and have no other funds to spare.
"It's just really expensive to get into a mortgage in the first place because the property values are so high on the Cape," he said.
Dowick said he anticipates temporary layoffs in the construction and other seasonal industries on the Cape may lead to even greater increases in foreclosures in January and February. Higher interest rates may also have an impact as loans with adjustable rates reset, he said.
When facing foreclosure, many homeowners make their situations worse by avoiding the problem rather than seeking counseling, or trying to work out a solution with their lenders, Davison said.
"Instead of coming to Housing Assistance Corp. for counseling or to their bank to let them know they've fallen behind, they go into denial," Davison said.
"They stay in denial until it reaches a point where it is difficult, if not next to impossible to come up with a solution to the delinquency."
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Copyright (c) 2006, Cape Cod Times, Hyannis, Mass.
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