even people without jobs are not losing their houses,how weird is this?<NFG>
Mass. home foreclosures drop for 3d year in row
Appreciation and low mortgage reats aid fall
By Thomas Grillo, Globe Correspondent, 1/20/2004
Despite a sluggish economy, the number of Bay State homeowners who faced foreclosure dropped for the third consecutive year in 2003 because of double-digit home appreciation and the lowest mortgage rates in a generation.
"Even if someone lost their job they could still refinance at historically low interest rates and keep their home," said Barry Bluestone, director of the Center for Urban & Regional Policy at Northeastern University. "That's been one of the unintended consequences of the extraordinary rise in housing values."
The surge in Massachusetts home prices coupled with falling interest rates has allowed financially strapped homeowners to use the equity in their homes and keep creditors away.
As a result, foreclosures fell to 4,167 in 2003, a 7.5 percent drop from 4,506 in 2002, according to the Massachusetts Land Court.
The average price for a single-family home in Massachusetts soared 15.4 percent to $370,843 last year, up from $321,343 at the close of 2002. Anyone who purchased a home in Greater Boston for $250,000 in 1998 saw its value last year increase to $431,259, or 72.5 percent, giving them the option of borrowing on their home's equity at low rates, according to the Office of Federal Housing Enterprise Oversight, an arm of the Department of Housing and Urban Development.
Last year, the average rate for a 30-year mortgage fell to 5.83 percent, the lowest level since the federal government began tracking rates in 1971.
Danny and Lucie Johnson came close to losing their four-bedroom home in Mattapan last year. Shortly after buying the red Victorian in spring 2000 for $205,000, the couple borrowed $43,000 from Household Finance Corp. at 18 percent for a new driveway, roof, and heating system.
They later refinanced their $243,664 mortgage with Household at 12.53 percent, including $17,665.63 in points and fees. In addition, Household gave them a personal loan of $15,000, which doubled their monthly payments to nearly $3,000. And when Lucie Johnson lost her job as a medical assistant, they missed payments.
Today, the Johnsons are enrolled in the Foreclosure Assistance Program at the Association of Community Organizations for Reform Now, a nationwide advocacy group with offices in Dorchester. The program is funded by $72 million from Household as part of a $484 million settlement reached in 2003 over alleged predatory lending practices.
Under the program, borrowers who have missed at least two mortgage payments will have their interest rates reduced by as much as 7 percentage points and unpaid late charges are waived. Within a year, participants are referred to lenders for market-rate loans. The Johnsons will see their monthly payment drop by $600 for at least six months until they can refinance the high-cost loan.
"I don't know what the future holds," said Lucie Johnson. "We almost lost our home and we're still scared because it's not
over." The region's housing crash in the late 1980s culminated in a record number of borrowers losing their homes, with 12,750 foreclosures in 1991. Since, foreclosures have fallen to their lowest levels in 14 years.
Karl Case, a Wellesley College economics professor and real estate analyst, said the crash began when developers built homes and condominiums at a frenzied pace while demand fell and unemployment rose. The buyers' market that ensued caused the housing bubble to burst and prices to fall, he said.
Many homeowners who bought in 1981 when mortgage interest rates reached nearly 17 percent were "upside down" on their mortgages -- a phrase used when a homeowner owes more than the home's value. That fact, coupled with high unemployment, led to the historic number of foreclosures.
Today, economists and brokers say, the New England housing market has remained hot despite rising unemployment and a lackluster economy. They say since the early 1990s few homes have been built on speculation and the majority of buyers are owner-occupants, not investors.
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