The total number of foreclosures in 36 Massachusetts communities north of Boston nearly tripled from January through September compared with the same period last year, showing the national mortgage turmoil is hitting home with a vengeance.
"You can see that it's a crisis," said John L. O'Brien, registrar of deeds for southern Essex County, based in Salem. "It's starting to take on a life of its own."
Lynn had 200 homes hit the auction block this year, about triple the 65 foreclosed on during the same nine-month period in 2006. In Haverhill, 107 homes were auctioned, more than double the 46 homes foreclosed on last year. Revere had 69 homes auctioned compared with 27 last year, according to the data.
Some new ways to avoid foreclosure, plus city and town auction numbers. Page 6
Amesbury had 27 foreclosures for the period, compared with six last year. Danvers has lost 16, compared with just three last year.
The numbers show the actual number of foreclosure deeds filed at registry of deeds offices in Essex, Middlesex, and Suffolk counties. A deed is recorded once a property has been auctioned.
The increases are the surest sign yet that the nation's troubled mortgage industry - driven by defaults in the subprime lending market - is hurting the local real estate market, industry watchers said.
The foreclosure crisis sweeping the Bay State prompted Governor Deval Patrick to unveil a five-point recovery plan Thursday in Lawrence, one of the state's hardest-hit communities.
The plan targets neighborhoods there and in five other Bay State cities with high foreclosure rates. But it also would provide help for struggling homeowners elsewhere. Lenders are encouraged to work with homeowners at least three months before a subprime loan increases, and to suggest they consider refinancing, a sale, or other options. Homeowners are urged to seek consumer counseling from a 24-hour hot line and consider alternative financing from MassHousing, the state's housing bank, according to an outline of the plan.
Foreclosure auction notices increased 149 percent for the first eight months of this year, compared with the same period last year, according to data released this month by The Warren Group, a Boston-based real estate tracking firm.
Essex and Middlesex counties far outpaced the statewide average. In Essex County, auction filings increased 188 percent, and in Middlesex County 204 percent. Suffolk County - which includes the local communities of Chelsea, Revere, and Winthrop - posted a 152 percent increase, according to data.
"When filings hit triple digits, you start to worry," said Timothy Warren, chief executive of The Warren Group. "These communities generally have housing stocks that are older, their prices and level of incomes are lower. It makes it very hard" for the market to recover.
An auction is the last step in foreclosure. Lenders begin by filing notices on properties in default. If a borrower and lender cannot work out a deal, then an auction is scheduled. Often, a lender will bid on the property at an auction in an attempt to protect its loan.
The numbers of lenders buying back properties at auctions now is on a par with the deep housing recession of the early '90s, a broker said.
"It's been years since we've seen anything like this," said Juliana Tache, a broker at Tache Associates in Salem, which is marketing more than 100 homes and condos owned by lenders. "The sad part is a bank or a mortgage company really doesn't want your house."
The buildup of lender-owned properties occurs as the region's real estate market continues a steady decline.
In August, single-family home sales were flat compared with a year ago, falling just 0.67 percent, but the median selling price declined 3.43 percent, to $338,000 , compared with the same month in 2006, the Warren Group reported.
One economist predicts the market will only continue to weaken as foreclosures pile up.
"There still is a lot of inventory," said John Bitner, chief economist at Eastern Bank in Lynn. "With all the turmoil in the subprime area, buyers are still hanging back. . . . It's going to take a while for the inventory to clear."
A slew of foreclosure properties hitting the market, which often are in bad shape or disrepair, could also drag down real estate prices, Warren said.
"A lot of distressed properties are clogging up the system," he said. "When you have a lot of bargain prices out there, it's hard for people to sell at the full, fair-market value."
In Lynn, at least 50 homes are for sale by mortgage companies and banks. They include a spacious "McMansion" near the Lynnfield line, priced at $399,900; a two-family priced at $299,999 across from a downtown school; and an old Colonial, priced at $320,500 overlooking a pond.
"With a foreclosure property, the real money to be made is through sweat equity," said Tache, the realtor marketing the properties.
"Once someone fixes these up, they could try to sell them. Hopefully, by the time winter is gone, the market will recover."
Kathy McCabe can be reached at firstname.lastname@example.org.