Wednesday, March 07, 2007

Music Stops In Massachusetts

The Boston Herald reports from Massachusetts. "The number of foreclosures in Boston is escalating dramatically in the new year as scores of the high-interest-rate subprime mortgages go bust. As of the end of February, lenders had filed 301 notices to foreclose against homes and condos in Boston, reports Dorchester housing researcher John Anderson."

"That’s up from 86 during the same period last year, according to Anderson. If the current pace continues, Boston could wind up with 2,500 to 3,000 foreclosure filings by the end of the year, Anderson estimates. That’s compared to the 1,100 foreclosure filings in Boston last year, the worst in the 10 years he has been tracking these numbers."

The trend, though, is not a new one, with foreclosures in the city having begun to rise as far back as 2005, Anderson says. 'It’s overwhelming,' Anderson said. 'Everybody who is all of a sudden concerned; they are two years behind.'"

"The nation’s subprime lending industry is now in full 'meltdown' and its woes are far from over, experts warned yesterday. 'It’s a total meltdown,' said Ernest Napier, an analyst with Standard & Poor’s. 'Everyone had anticipated that the music would stop (on these type of high-risk mortgages). Well, it has.'"

"'I think we’re just seeing the tip of the iceberg,' said Lee Forker, president of Boston’s New England Research and Management. 'This is serious stuff. . . . It’s not time to be putting your head in the sand.'"

"Gerard Cassidy, an analyst at RBC Capital Markets, agreed the situation is serious, especially since subprime lending accounted for about 22 percent, or more than $550 billion, of the entire $2.5 trillion mortgage industry in 2006."


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