The Foreclosure Report

'Dry Fix' Of Equity Withdrawals Hits Essex Co, MA

The Newburyport Current found rising foreclosures in Massachusetts. "No other community in Essex County has seen a more drastic surge in foreclosures this year than Newburyport."

"Nineteen homeowners so far have been taken to court for falling behind on their mortgage payments compared to six during the same period last year. Although Lynn tops the list of the greatest number of foreclosures, they are not increasing nearly as fast as here. The 217 percent spike propelled Newburyport to the top slot in the county."

"'When you, like in Essex, see a jump from one to three you can't really draw any conclusions, but six versus 19 is significant,' Jeremy Shapiro said. 'People are in deep ... stuff,' said Donald Adler, a local bankruptcy attorney. 'I think we're going to see much more of it, because people buy without a solid financial foundation ... Before, the income had to be able to support the mortgage. That's unheard of today.'"

"Alluring mortgage offers such as no-money down, interest-only loans and adjustable rate mortgages have made homeowners particularly vulnerable to unexpected loss of income. As in other communities, many local homeowners have also taken advantage of the skyrocketing value of their homes by tapping into the equity to do anything from paying off credit cards to building extensions."

"'It becomes like a dry fix, 'I think I'll hit my equity this month',' said Charlie Shachat. 'There's tremendous amounts of money being pulled out of the equity. The question is what happens when the money runs out and you're used to a big lifestyle.'"

"The Provident Bank's vice president of residential lending, Susan Gonis, also said the bank works with customers before it gets too late. Foreclosure is, according to Adler, more likely among obscure out-of-town lenders that are 'very difficult' to reach for the homeowner."

posted by Ben Jones @ 2:27 PM