Berkshires See Spike in Demand for Foreclosure Prevention Programs

Mar 20, 2013

In the first quarter of 2013, the foreclosure crisis affecting Western Massachusetts and the Berkshires appears to be worsening despite national trends of an improving housing market.

Credit WAMC

As a result of a $25 billion national settle with major lenders over their foreclosure practices, the Massachusetts Attorney General’s Office over the past year has partnered with community organizations to offer assistance to those who face foreclosure in a campaign called HomeCorps.

For one of the programs, in 2012 the Massachusetts Association for Community Action Program – or MASSCAP – was awarded $7.4 million from the Attorney General’s office  to partner with organizations across Massachusetts to oversee the so-called Borrower Recovery Initiative, which provides legal assistance for homeowners hoping to obtain a loan modification, brings claims against banks for improper forclosures, and also legally represents homeowners facing eviction charges.

One of those partner organizations is the Berkshire County Regional Housing Authority. Executive Director Brad Gordon said that over the course of 2012 he noticed a trend more families seeking assistance as the year went on.

"In the last four months of 2012 it was up over 120 so it was trending in a direction that in fact foreclosures were on the rise," said Gordon.

And that trend, Gordon says, is continuing in 2013.

Gordon said that in Berkshire County alone, there are about 300 active foreclosures. And since the Housing Authority began promoting the Borrower Recovery Inititiave this week after a soft rollout, Gordon is seeing  a higher demand for assistance than expected.

"Through this week there's been about 14 cases that have contacted us." Gordon said, "We anticipated about 40 cases in a twelve-month period."

Deb Broaden of the Western Massachusetts Foreclosure Prevention Center, which serves homeowners in the four counties of Western Massachusetts, says that the influx of foreclosure cases Brad Gordon is seeing is not surprising.

"Once customers feel that there's something new out there...that means your numbers are going to spike because now you have homeowners going back out and trying to seek help," Broaden said.

Broaden highlighted urban areas including Springfield, Holyoke, Chicopee, and Pittsfield as hot spots for the foreclosure crisis, but she also said that families are facing foreclosures throughout the state.

Though much attention in the press has been given to a recovering housing market and declining foreclosure rate, Broaden said that Western Massachusetts will continue to face challenges for some time.

"At least two more years of this, absolutely," said Broaden.

Broaden added that underwater homes across the state that are currently unable to be sold are dragging on the recovery.

Broaden said that it is difficult to compare foreclosure rates between the eastern and western parts of the state due to different economies of each region.

Brad Gordon says in the Berkshires, housing prices did not reach some of the peaks seen in other parts of the state. But when the real estate bubble first blew, home prices didn’t sink as much as in areas outside of the Berkshires.

According to statistics provided from the Attorney General’s office, the Borrower Recovery Initiative through the HomeCorps campaign has assisted more than 400 families its inception last fall.

Also, a recent vote by city councilors in Springfield rejected a settlement with several banks over a foreclosure ordinance. The vote will require banks to post a $10,000 bond to maintain and secure vacant and foreclosed property, relieving city taxpayers of the costs associated with eradicating blight due to foreclosures.

For more information on the programs offered through the Massachusetts Attorney General's HomeCorps  campaign, visit here.