PITTSFIELD — Even as local real estate values strengthened in 2018, one leading indicator of distress glowed red.
The number of scheduled foreclosure auctions in the Berkshires increased last year over 2017, as borrowers' troubles continued to put home ownership at risk for hundreds.
Last year, 277 properties in Berkshire County were set for auction due to nonpayment of loans, 45 more such listings than in 2017 — an increase of 19.3 percent. As is customary, not all of those auctions took place, as borrowers, and outside investors, angled to work out loan problems before an auctioneer called out "sold."
But the rise in scheduled auctions runs counter to the trend in Massachusetts, according to Timothy Warren, CEO of The Warren Group, a real estate data firm.
The number of initial foreclosure petitions in Massachusetts in 2018 was about a tenth of the tally seen in 2007, at the start of the national foreclosure crisis.
For Berkshire County, however, the 150 foreclosure petitions filed last year represented 44.3 percent of what the region saw when those figures peaked at 338 in 2007.
"That's not nearly as much improvement as statewide," Warren said of the Berkshire numbers. "Things are tough. It's the story of the country as a whole — unequal distribution of pain."
A foreclosure auction was scheduled to take place Monday afternoon on Lyman Street in Becket. Other sales are set in coming weeks on Meadow Ridge and North Street in Pittsfield, on Harrison Avenue in North Adams and on Commercial and Crotteau streets in Adams.
So far this year, the county has seen nine initial foreclosure petitions, 23 scheduled auctions and nine actual foreclosure deed filings, according to The Warren Group.
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Due to lags in handling delinquent mortgages, initial foreclosure petitions are often filed a year before the properties they concern reach the point of auction.
Because of that, the trend over three years suggests the county may be working its way out of a backlog of troubled mortgages.
The 150 initial foreclosure petitions filed in 2018 were 29.2 percent fewer than the 212 filed the year before — and also lower than the 223 petitions filed in 2016.
But to date, hope for relief is only that. The number of properties actually transferred through the foreclosure process has remained steady in Berkshire County: 179 in 2016, 182 in 2017 and 169 in 2018.
The rise in auction dates is a bugle call to the Berkshire County Regional Housing Authority, which provides free foreclosure counseling to homeowners.
Jim Hamilton, the authority's foreclosure prevention specialist, says he stands ready to provide advice to people behind on their mortgages.
"Most people save and scrimp every dollar they can until it's overwhelming," Hamilton said of his clients. "Serious events happen in their lives."
Brad Gordon, the authority's executive director, said he isn't sure why the county saw a jump in scheduled auctions in 2018. But the numbers show that nearly a decade after the official end of the Great Recession in June 2009, residents of the Berkshires are finding it harder to keep up with mortgages than some others across the state.
"Statewide, the numbers are way down," Gordon said. "We have a whole bunch of people who are being left behind."
In 2018, 169 foreclosure deeds were filed in Berkshire County indicating actual property transfers. That's more than the 157 deeds filed for Suffolk County, which as of 2017 had more than six times as many residents.
"We still have this reality that all of these people are being displaced. It has a real cost to the community," Gordon said.
Gordon believes foreclosure remains a problem in the Berkshires in part because wages and job opportunities lag other regions of the state. Another reason might stem from a mismatch between workers and employers.
"They don't have the skill set to access jobs that pay a living wage," he said.
In addition to surrendering whatever equity they may have in their homes, borrowers with families face the risk of losing shelter entirely after an auction, Hamilton and Gordon say.
That's because the monthly cost of finding a two- or three-bedroom apartment in the area is much higher than typical mortgage payments.
Renters should expect to pay $1,048 a month for two bedrooms, $1,342 for three bedrooms and $1,463 for four bedrooms, according to the U.S. Department of Housing and Urban Development.
"You're going from a mortgage that might be $750 a month to $1,400," Hamilton said, referring to rental costs for a large family.
Increase in requests
Hamilton said that in the last six months, he's received an increase in calls from people hoping to avert foreclosure.
He said people often wait too long to seek help. Some tell him their foreclosure auction is closing in. Often, new clients arrive with piles of paperwork in a shopping bag. Those documents can include unopened bills, a common sign borrowers are struggling to cope emotionally.
Once lenders begin the process of collecting or foreclosing on a debt, the pressures rise.
"People are already on the edge and they get totally worn down," Gordon said. But if they can rally and work on their own behalf, he said the authority's clients can improve their chances.
"We don't want to overpromise, but I feel we can set them up to have the best landing," Gordon said of those who sign up for counseling.
The best time to seek counseling is before falling behind on payments, or at least when late-payment notices begin to arrive. Another milestone moment is when a borrower fails to reach a modification of mortgage terms.
In his counseling work, Hamilton attempts to improve relations between lender and borrower and scouts for opportunities to repair that relationship. That can include exploring what modifications the lender can accept, use of new payment plans and other options, including short sales or what's known as a "deed in lieu of foreclosure."
A short sale is a property transfer in which the amount taken in, while less than what's owed on a mortgage, is deemed acceptable to all parties, resolving the impasse. A deed in lieu of foreclosure conveys a property to the lender without the step of actual foreclosure, which can be preferred in some cases.
"If the numbers work, it can work out," Hamilton said of the counseling program in general.
For a borrower, a key step is facing up to the financial crisis at hand, and not looking away from it. Hamilton acknowledged that for borrowers, a barrage of mail and phone calls from lenders or their representatives can be overwhelming.
Hamilton says he urges people to look as objectively as possible at their financial challenges and be organized — not reactive — on seeking a way out.
"Avoiding the anger and frustration that comes with the niggling requirements of the lender," he said.
Warren, of the data firm, said that when borrowers reach the stage of having properties listed for auction, it's probably too late for help.
"That's a time of high stress and real danger," he said. "They should be seeking some help before it gets that far."
Larry Parnass can be reached at email@example.com, at @larryparnass on Twitter and 413-496-6214.