Mounting foreclosures in Massachusetts -Who is to be blamed?

The foreclosure rates in Massachusetts are witnessing a continuous rise. According to the data of foreclosure filings, the state of Massachusetts reported a total of 23,116 foreclosure filings during the period April 2006-07. With the foreclosure rate skyrocketing, politicians and real estate experts have started finding out targets to put the blame on, and subprime loans and eventually subprime lenders have emerged as the unanimous culprit, responsible for the current foreclosure position in the state.

Many are of the opinion that during the boom period in the housing market, lenders targeted needed borrowers by making several loan options available to them. Loans were available without any documentation even to people who had no income. Borrowers were lured because these loans were available at a minimal interest rate. Several borrowers borrowed money in order to take advantage of the hot market. Thus properties were purchased with the purpose of selling them at a higher price and thus make huge profits. However, dreams of several borrowers were shattered due to the rising interest rates and the softening of home prices. Borrowers were not able to keep up with their mortgage payment, due to which their property entered foreclosure. Many households in Massachusetts have such stories to tell.

However, it is not right to put the entire blame of the lenders. One must not ignore the fact that the sub prime lenders wouldn’t have been successful in their task without the huge amount of co-operation, which they received from buyers. The ignorance of the buyers, as many buyers borrowed money without doing enough homework, without any calculation and reading and understanding the document before signing on it was equally responsible for the foreclosure crisis in the state. However this aspect was just not limited to undereducated buyers or to those buyers who had low income. In fact there are several instances in the state where educated buyers also fell in to the trap. This is revealed by the fact that 3 areas of Massachusetts namely Boxborough, Topsfield, and West Newbury, which comprises people from the higher income strata, were the ones who showed the largest increase in its foreclosure rate.

The recent increase in foreclosure in the subprime mortgage market in Massachusetts have made politicians and experts put their thinking caps on so as to find ways and means of putting an end to this trend. On legal front, the Massachusetts Legislature has put forth several laws which would not only provide counseling to borrowers with sub prime loans but also provide financial relief to those who are the victims of such sub prime borrowing. Other than this, several non-profit organizations are also available in the state that provides financing assistance to needy people.

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