BOSTON, June 30, 2008 – Foreclosure deeds in Massachusetts broke another record in May, soaring to their highest recorded level. Meanwhile, a new state law that took effect May 1 has postponed the first step of the foreclosure process for many homeowners, according to The Warren Group, publisher of Banker & Tradesman.

Foreclosure deeds – the final step in the process – rose 107.5 percent in May, from 677 in May 2007 to 1,405. Deeds are also up 5.3 percent from 1,334 in April 2008. Year-to-date, deeds rose 139.6 percent, from 2,327 in the first five months of 2007 to 5,576 this year.

The new law that stalled petitions – the first step of the foreclosure process – is part of a foreclosure-prevention bill passed last November. It requires lenders intending to foreclose upon a delinquent borrower to give the borrower 90 days – free from any fees – to “cure” a default on the loan.

“May petitions to foreclose were down to one-tenth of what they were in April, but that was surely a temporary decline,” said Timothy Warren Jr., CEO of The Warren Group. “Foreclosure deeds continued to rise to levels we haven’t seen since we started to record them in 2005, signaling that this problem is far from over.

“It’s still extremely difficult for homeowners to halt the foreclosure process once it’s begun. The slow housing market makes it hard to sell a home that is in danger of being foreclosed, and the tight credit market makes it a challenge for those with less-than-perfect credit to refinance. This law may give homeowners a little more time to try and resolve their problems, but I expect to see a flood of petitions to foreclose after 90 days of this law being in effect.”

There were 390 petitions to foreclose filed in May, down 81.9 percent from the 2,158 filed in May 2007. That is also down 88.3 percent from the 3,327 filed in April.

Even with the sharp downturn in May, petitions filed in the first five months of the year are up 20.2 percent, from 10,591 in 2007 to 12,726 this year.

Auction announcements in May rose 33.9 percent, from 1,483 in May 2007 to 1,986 this year. Year-to-date auction announcements increased 43.5 percent, from 6,212 to 8,914.