Foreclosures Hit The More Exclusive

Posted on January 8th, 2008 by saman

A startling number of Greater Boston’s most exclusive residential localities are facing a sudden and disturbing upsurge of foreclosure activity. The epidemic that has devastated the real estate market landscape across the country has now not even spared one of America’s wealthiest suburbs like Wellesley, Sudbury, Weston and Newton: all of them experiencing a big increase in foreclosure court proceedings. This comes in as the statistical report for last year collected by the Warren Group.

The figures, usually only a few scores or even less in each town, are still only incremental when put up against those thousands of filings related to foreclosure that are thrashing home owners of the poorest areas of the state.

Foreclosure filings in Wellesley increased by more than 200 percent through last year from a last year’s figure of thirteen to thirty this year up till October. The numbers also increased in similar proportions in Weston, where twelve foreclosure filings were reported, compared to just six last year. Areas like Sudbury, Newton and even Needham made big leaps in numbers: Sudbury underwent one of the largest increases of any town in Metro West, with Foreclosure filings swelling up by 145 percent, from a mere 11 back in 2006 to 27 in 2007. Figures in Newton increased by 22 percent, with its 60 foreclosure filings with dates for the year ended October 2007, while Needham went through another 26 foreclosure filings last year, a rise exceeding 36 percent, according to data from the Warren Group.

These are changes incremental in size but potentially epidemic in its consequences according to Robert Pulster, head of a nonprofit from Boston ESAC who has been counseling foreclosure victims as part of his organization.

“I don’t think this is just a low-income problem,” he says.

At the same time, more condo owners are also lagging on their payment schedule for their mortgage in downtown Boston, the place one can find the most expensive condos in America: data from a real estate publisher from Boston reports. Here, neighborhoods like South End, Back Bay, and Beacon Hill saw an exponential increase in number of filings for foreclosure which skyrocketed by twenty five percent last year, from twenty five to as high as seventy four. In neighboring Brookline, the filings came in quick succession totaling to thirty-two filings in 2007: a net increase of eighteen percent.

Analyst Alan Pasnik, an analyst for real estate for the Warren Group, attributes some of this aberrant activity in these well-off towns and neighborhoods to hype in home owners, who went beyond what they can pay for to purchase during the crash that flooded the market in 2004 and 2005. This led those buyers to commit those invariable mistakes due to which many now face the loss of their homes, like borrowing loans at variable rates that later amounted to much higher rates, even though the actual home values did fall.

The figures here may be small, the number of those affected still insignificant. But they do expound a crucial actuality: trends leading to rampant foreclosures will be affecting America throughout, and even the wealthier communities cannot escape the predicament.