Foreclosures in Massachusetts soared by nearly 80 percent in July compared to the same period a year ago, according to new figures released yesterday.
On the North Shore, the number of July foreclosures more than doubled in Beverly, Danvers and Salem and increased sharply in Hamilton and Marblehead, according to the report by The Warren Group, which publishes Banker & Tradesman.
"You can correlate the foreclosure problem we have right now to a 9 percent unemployment rate," said Vincent Valvo, the publisher and editor-in-chief of Banker & Tradesman. "They are inextricably hand in hand."
Simply put, homeowners are finding it more difficult to make their mortgage payments each month. While the unemployed are facing steep obstacles, so, too, are people with jobs.
Some haven't seen a raise in two or three years, Valvo said. Others have taken pay cuts, scaled back their hours or been forced to leave their white-collar jobs for lower-paying work in manufacturing or service industries.
Less income means less money to pay the mortgage bill at the end of the month.
"You add all of those oars together and pretty soon you're rowing a boat into a lake of foreclosures," Valvo said.
Other factors have also contributed to the rise. Massachusetts recently enacted a 90-day "right to cure" law that delayed the start of the foreclosure process and pushed back many of the actual foreclosures.
Mortgage providers Fannie Mae and Freddie Mac enacted a holiday moratorium on new foreclosures in December 2008 and January 2009, which also delayed the ultimate foreclosures, he said.
Year-to-date foreclosures have risen in Beverly, Boxford, Danvers, Hamilton, Peabody, Marblehead, Swampscott, Wenham and Middleton.
Eleven foreclosures have been recorded in Hamilton this year, compared to just one in that community at this point in 2009.
In Marblehead, the number has climbed from five last year to 15 this year.
Across the state, there were 1,243 foreclosures, a dramatic jump from the 692 recorded in July 2009. So far, Massachusetts is on track to outpace foreclosure activity from the past two years, according to The Warren Group.
The actual number of foreclosure petitions — the first formal stage of the foreclosure process — actually dropped by about 20 percent compared to last year. However, Valvo attributes that to the housing tax credit in effect, which may have lured more prospective homeowners to the market.
"People that were having trouble were probably able to get themselves out of trouble by selling, because there was a wave of buyers that suddenly appeared.
Nonetheless, Valvo doesn't see an end to the woes plaguing cash-strapped homeowners.
"Given that every economist I've read says that the unemployment numbers are going to be staying very high for a number of years, I think our foreclosure crisis has pretty much settled in like a college grad settling in with Mom and Dad," Valvo said. "They're going to be there for a while."
Staff writer Chris Cassidy can be reached at ccassidy@salem news.com.
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