Massachusetts and Hampden County Foreclosure Rates Compared

Given the current economic crisis inflicted upon our country and more immediately our county, it appears impossible to go even a few hours without being reminded of our uncertain economic future. With all of the staggering foreclosure and unemployment rates being announced in our newspapers and news programs, it has become quite difficult to gauge our current situation, let alone hypothesize the future. Upon gathering and comparing Massachusetts and Hampden County foreclosure rates for October 2008 and October 2009, there appears to be some signs of hope. While the positive results are too premature to warrant a sigh of relief, any bit of good news is just that….good news! Though Massachusetts saw a 30% increase in foreclosures from September 2009 to October 2009, the state’s foreclosures decreased from 588 in October 2008 to 503 in October 2009. In Hampden County, the number of completed foreclosures decreased 9.1% from 88 in October 2008 to 80 in October 2009.

Though a statistical decrease of this nature is definitely a positive sign, it is important to note that this trend may not continue due to the combination of increased unemployment rates that are expected to remain considerably high until late 2010, as well as a large number of adjustable rate mortgages, which upon fluctuation, may leave some homeowners unable to afford the newly adjusted mortgage. While the unemployment rate in Massachusetts has seen its first decrease since June 2007 from 9.3% in September 2009 to 8.9% in October 2009, there still was a 53.5% increase in unemployment from 5.8% in October 2008 to 8.9% in October 2009. In other words, we have a long way to go. Hampden County also experienced an increase in unemployment from 6.6% in October 2008 to 9.9% in October 2009. The large percentage increases in the Massachusetts and Hampden County unemployment rates are quite unnerving due to the common correlation between unemployment and foreclosures. Aware of the disastrous effect that foreclosures can have on the economy, many federal and state agencies are intervening to reduce the foreclosure rate. For example, lawmakers in Philadelphia are requiring mediation between lenders and mortgage holders in hopes that they can come to an agreement which would prevent foreclosure. The effectiveness of this model has been met with mixed reviews.