The property at 4-6 Newbury St., which includes a 160-car garage and first-floor retail space across from the Taj Boston Hotel, faces foreclosure, because its owner defaulted on the mortgage, according to a legal notice published yesterday.

The building is owned by Newbury Garage Associates LLC, which state corporation papers indicate is headed by Nader Golestaneh. Golestaneh, president of Boston’s Centremark Properties Inc., did not return calls for comment.

Jack Polatin, a Boston attorney representing the property’s mortgage holder, declined comment yesterday.

In April 2008, Golestaneh won Boston Redevelopment Authority approval to redevelop 4-6 Newbury in what would have been the first new major retail and office building on the upscale shopping thoroughfare. The estimated $14 million project never proceeded, however.

Golestaneh planned to tear down the 1980s-era, 49,000-square-foot garage and replace it with a seven-story building with three floors of retail space topped with four floors dedicated to offices, and 15 underground parking spaces.

“It’s a phenomenal retail location, and I think that a long list of retailers would love to be on the first block of Newbury Street – recession or no recession,” said Andy LaGrega, a partner at Wilder Cos., a retail development firm in Boston. “Prime properties, especially on Newbury Street, always are sought after.”

Retail rents for the property would fetch well over $100 per square foot and probably approach $200 per square foot for the first floor, LaGrega said.

Goodman, who took part in a panel discussion on the real estate market I moderated last week at the InterContinental Hotel in Boston, contends one in five homes is either in foreclosure or facing potential foreclosure trouble down the line.

That’s a whopping 11.6 million homes, or about 20 percent of the market, she told members of the Boston Security Analysts Society, which hosted the discussion.

It’s a number that arguably provides a more comprehensive picture than the conventional default rate – 13.5 percent according to the Mortgage Bankers Association.

And it clashes with conventional thinking in a banking industry bracing for another 4 million foreclosures, not double or triple that number. Here’s a link to a recent report by Goodman and Amherst that lays out the numbers.

Goodman’s forecast takes into account a high rate of re-default among struggling homeowners taking part in various, government-sponsored mortgage modification programs.

Goodman’s breakdown goes roughly like this. Twenty of every 100 loans are “impaired.” Of these, nine are seriously behind on their payments. Another six are now “Dirty Current” – in various government modification programs whose graduates have been defaulting at a rate of 50 percent a year. The final five are underwater on their mortgages by more than 20 percent – a group that has been defaulting at a rate of 20 percent a year.

It is a crisis that is more staggering that most of us realize – and is likely to have a much more dramatic impact on both federal policy and the banking industry than many are bargaining for right now.

Goodman predicts Uncle Sam will eventually have to embrace mortgage write-downs – letting 11 million-plus homes slide into foreclosure will prove politically untenable to policymakers and politicians in Washington.

“You have 11.6 million units in jeopardy,” Goodman said. “That is one borrower out of every five. You can’t foreclose on one borrower in five.”

“Politically this cannot happen. Successive mortgage modification programs will be attempted until something works,” she notes in a recent report.

Meanwhile, the banking industry could take a huge hit as well.

Nouriel Roubini, the economist who predicted the financial crisis and who has been dubbed “Dr. Doom” by the press, has looked at Goodman’s numbers and is warning of serious problems ahead for banks.

He pegs the potential damage at a cool trillion.

Ouch!

While the 557 completed foreclosures statewide last month was down 39 percent from the 914 foreclosures in October last year, a total of 11,334 foreclosure deeds have been completed this year, up 47 percent from the same period last year. 

In Melrose, there were two completed foreclosures last month, one more than in October 2009, but the more significant increase is the 24 completed foreclosures in Melrose so far this year, compared to nine in the same period last year. That’s a 166 percent increase.

Completed foreclosures statewide already outnumber the amount recorded in the Bay State in 2009 and could outpace the record number in 2008. There were 12,430 and 9,269 foreclosure deeds in all of 2008 and 2009, respectively.

In a press release, Timothy M. Warren Jr., CEO of The Warren Group, said that recent decreases in foreclosures compared to last year are “welcoming,” but that the state “should not be fooled into thinking” that foreclosure problems are a thing of the past.

“Due to job and economic conditions, many homeowners are delinquent on their mortgages and those problems will eventually find their way into foreclosure statistics,” Warren said.

Foreclosure petitions in Massachusetts, the first step in the foreclosure process, dropped statewide to 1,127 in October, a near 51 percent decrease from 2,296 in October 2009. Melrose saw a similar percentage drop in foreclosure petitions, from seven in October 2009 to three last month, a 57 percent drop.

So far this year in Massachusetts, a total of 22,091 foreclosure petitions have been filed, compared to 23,931 for the same period last year. In Melrose, lenders have initiated 50 foreclosure processes so far this year, just about a 4 percent decline from the 50 foreclosure petitions filed in 2009 year-to-date.

However, Warren said that recent temporary freezes in foreclosure filings by banks may be the cause for the decline.

“It’s possible that this decline in foreclosure starts was influenced by the example set by Bank of America when they temporarily suspended foreclosure activity,” he said. “Lenders may have waited to file petitions while rechecking their procedures and paperwork. As a result, we are likely to see a decrease over the next few months because of these delays.”

October marked the highest number of auction announcements tracked by The Warren Group so far this year. Auction announcements jumped more than 26 percent to 3,292 from 2,603 in October 2009 and were also 43 percent higher than the 2,301 auction announcements tracked in September.

That’s all the time it took one recent afternoon to complete the foreclosure auction, one of thousands happening on the lawns and sidewalks of Massachusetts homes at a rate of about one every hour.

Sotheby’s this is not.

About a half-dozen representatives of potential buyers milled out front. Dressed mostly in jeans and sweatshirts, they snapped photos with cellphone cameras as curious neighbors watched. The homeowner, too embarrassed to stay, had sought refuge at a nearby coffee shop.

“I don’t want to be here when it happens,’’ she said minutes earlier.

The auction itself went quickly. Five minutes and two bids later, the house was sold.

While much of the real estate industry has gone digital, foreclosure auctions survive as a throwback to centuries ago. Massachusetts law requires auctions to be held onsite under the purview of a licensed auctioneer. A few auctioneers still break a tree branch to prove they were present, a custom rooted in English common law.

The land-takings — often postponed multiple times — usually result in a lender owning the property. That’s because bids come in too low or there aren’t any prospective buyers. But either way, a foreclosure auction is a humiliating experience for the homeowner, whose financial ruin is on public display.

Auctioneers said they try to handle the proceedings with diplomacy and discretion.

“We’re very, very sensitive to these situations,’’ said Marianne F. Sullivan, an auctioneer and the president of Sullivan & Sullivan Auctioneers LLC, a Boston firm that holds more than 100 auctions a month.

As the state’s foreclosure crisis drags on, auctions are taking place at a record pace this year. Before the housing market collapsed, only a handful of foreclosure auctions were held each day across the state. But by the end of September, nearly 11,000 properties had been seized — 58.6 percent more than during the same period last year and more than in all of 2009, according to Warren Group, a Boston firm that tracks real estate.

Bay State Auction Co., which sold the Malden house, had scheduled 23 foreclosure auctions that same day. In one important way, however, the Beachview Avenue auction was unusual: There was a buyer, a lanky, gray-haired man who successfully bid $268,000.

So far this year, about 80 percent of deeds filed at foreclosure auctions have gone back to lenders, according to Warren Group. There are two reasons for the buybacks: Banks generally won’t accept bids for less than what is owed on the mortgage, and potential buyers, still unsure about prospects for home values increasing, are not willing to pay that much

Jim Robertson, a Boston developer who regularly attended auctions — a legal notice announcing each one must be published in a local newspaper — said bargains are hard to find.

“I went to the auctions for a solid year and it ended up being a waste of time,’’ Robertson said. “The banks essentially weren’t selling them.’’

Gary Klein, a Boston housing lawyer who works with homeowners trying to avoid foreclosure, said it does not have to be this way. Too often, lenders foreclose when it would serve everyone better if they worked with homeowners to modify a mortgage, he said. By lowering monthly payments or making other adjustments, Klein said, banks would not be stuck with unwanted properties, and more people would be able to stay in their homes.

“What’s crazy in this market is there continues to be a rush to foreclosure even though there’s no market for the properties,’’ he said.

At a foreclosure auction of a tidy Cape-style house on John Street in Revere last Wednesday, six potential bidders showed up. Most declined to comment and shied away from a photographer. One covered his face with the hood of his sweatshirt.

Auctioneer Mary Scimemi opened the bidding at $177,000. A bank representative responded with an offer of $176,000. The cast of would-be buyers murmured into cellphones, consulting with their backers. Most people who come to auctions are not private citizens looking for a home, but representatives of real estate investors hoping for a deal.

“Going once? Twice? Three times?’’ Scimemi asked.

“Sold back to the bank!’’ she declared after a pause.

Inside, Benjamin Palencia, his girlfriend, and her 3-year-old daughter ate lunch. Palencia said they have lived there for five months, renting it from a friend.

“I didn’t know he had a problem with this house,’’ Palencia said, adding that he isn’t sure whether he will be evicted, or where he might move.

In 23 states, lenders must receive approval from a judge before foreclosing on a home. That’s not the case in Massachusetts, where owners learn about auctions through certified letters from lenders. Homeowners have few options, unless they can afford to hire a lawyer and file a lawsuit to dispute the land-taking.

At another recent auction of a well-kept Cape on Belnel Street in Hyde Park, Scimemi — the auctioneer who works for Bay State Auction — was surrounded by a crowd, including a group of activists from City Life/Vida Urbana, a Jamaica Plain nonprofit that regularly protests foreclosures. The group is angry at banks for not doing more to help people keep their homes, and is upset at investors who, they say, are trying to take advantage of someone else’s misfortune.

The activists held signs, and one protester, Marshall Cooper Jr., yelled: “That’s right. Take a walk investors, take a walk brother.’’

There were two potential bidders in attendance but neither countered the offer of the lender, Beneficial Massachusetts Inc. It bought the property for $174,000, and the homeowner will now face eviction.

At the Malden auction, the ending was far different, but no less dramatic. The gray-haired mystery bidder who bought the Beachview Avenue house turned out to be the homeowner’s father.

He put down a $5,000 nonrefundable deposit, and has 30 days to pay the balance, helping his daughter avoid becoming another foreclosed owner looking for a place to live.

Problems emerging in courts across the nation are varied but all involve documents that must be submitted before foreclosures can proceed legally. Homeowners, lawyers and analysts have been citing such problems for the last few years, but it appears to have reached such intensity recently that banks are beginning to re-examine whether all of the foreclosure papers were prepared properly.

In some cases, documents have been signed by employees who say they have not verified crucial information like amounts owed by borrowers. Other problems involve questionable legal notarization of documents, in which, for example, the notarizations predate the actual preparation of documents — suggesting that signatures were never actually reviewed by a notary.

Other problems occurred when notarizations took place so far from where the documents were signed that it was highly unlikely that the notaries witnessed the signings, as the law requires.

On still other important documents, a single official’s name is signed in such radically different ways that some appear to be forgeries. Additional problems have emerged when multiple banks have all argued that they have the right to foreclose on the same property, a result of a murky trail of documentation and ownership.

There is no doubt that the enormous increase in foreclosures in recent years has strained the resources of lenders and their legal representatives, creating challenges that any institution might find overwhelming. According to the Mortgage Bankers Association, the percentage of loans that were delinquent by 90 days or more stood at 9.5 percent in the first quarter of 2010, up from 4 percent in the same period of 2008.

But analysts say that the wave of defaults still does not excuse lenders’ failures to meet their legal obligations before trying to remove defaulting borrowers from their homes.

“It reflects the hubris that as long as the money was going through the pipeline, these companies didn’t really have to make sure the documents were in order,” said Kathleen C. Engel, dean for intellectual life at Suffolk University Law School and an expert in mortgage law. “Suddenly they have a lot at stake, and playing fast and loose is going to be more costly than it was in the past.”

Attorneys general in at least six states, including Massachusetts, Iowa, Florida and Illinois, are investigating improper foreclosure practices. Last week, Jennifer Brunner, the secretary of state of Ohio, referred examples of what her office considers possible notary abuse by Chase Home Mortgage to federal prosecutors for investigation.

The implications are not yet clear for borrowers who have been evicted from their homes as a result of improper filings. But legal experts say that courts may impose sanctions on lenders or their representatives or may force banks to pay borrowers’ legal costs in these cases.

Judges may dismiss the foreclosures altogether, barring lenders from refiling and awarding the home to the borrower. That would create a loss for the lender or investor holding the note underlying the property. Almost certainly, lawyers say, lawsuits on behalf of borrowers will multiply.

In Florida, problems with foreclosure cases are especially acute. A recent sample of foreclosure cases in the 12th Judicial Circuit of Florida showed that 20 percent of those set for summary judgment involved deficient documents, according to chief judge Lee E. Haworth.

“We have sent repeated notices to law firms saying, ‘You are not following the rules, and if you don’t clean up your act, we are going to impose sanctions on you,’ ” Mr. Haworth said in an interview. “They say, ‘We’ll fix it, we’ll fix it, we’ll fix it.’ But they don’t.”

As a result, Mr. Haworth said, on Sept. 17, Harry Rapkin, a judge overseeing foreclosures in the district, dismissed 61 foreclosure cases. The plaintiffs can refile but they need to pay new filing fees, Mr. Haworth said.

The byzantine mortgage securitization process that helped inflate the housing bubble allowed home loans to change hands so many times before they were eventually pooled and sold to investors that it is now extremely difficult to track exactly which lenders have claims to a home.

Many lenders or loan servicers that begin the foreclosure process after a borrower defaults do not produce documentation proving that they have the legal right to foreclosure, known as standing.

As a substitute, the banks usually present affidavits attesting to ownership of the note signed by an employee of a legal services firm acting as an agent for the lender or loan servicer. Such affidavits allow foreclosures to proceed, but because they are often dubiously prepared, many questions have arisen about their validity.

Although lawyers for troubled borrowers have contended for years that banks in many cases have not properly documented their rights to foreclose, the issue erupted in mid-September when GMAC said it was halting foreclosure proceedings in 23 states because of problems with its legal practices. The move by GMAC followed testimony by an employee who signed affidavits for the lender; he said that he executed 400 of them each day without reading them or verifying that the information in them was correct.

JPMorgan Chase and Bank of America followed with similar announcements.

But these three large lenders are not the only companies employing people who have failed to verify crucial aspects of a foreclosure case, court documents show.

Last May, Herman John Kennerty, a loan administration manager in the default document group of Wells Fargo Mortgage, testified to lawyers representing a troubled borrower that he typically signed 50 to 150 foreclosure documents a day. In that case, in King County Superior Court in Seattle, he also stated that he did not independently verify the information to which he was attesting.

A spokesman for Wells Fargo said the bank was confident in its foreclosure policies and practices; he also noted that the judge overseeing the case involving Mr. Kennerty had ruled in favor of the bank.

In other cases, judges are finding that banks’ claims of standing in a foreclosure case can conflict with other evidence.

Last Thursday, Paul F. Isaacs, a judge in Bourbon County Circuit Court in Kentucky, reversed a ruling he had made in August giving Bank of New York Mellon the right to foreclose on a couple’s home. According to court filings, Mr. Isaacs had relied on the bank’s documentation that it said showed it held the note underlying the property in a trust. But after the borrowers supplied evidence indicating that the note may in fact reside in a different trust, the judge reversed himself. The court will revisit the matter soon.

Bank of New York said it was reviewing the ruling and could not comment.

Another problematic case involves a foreclosure action taken by Deutsche Bank against a borrower in the Bronx in New York. The bank says it has the right to foreclose because the mortgage was assigned to it on Oct. 15, 2009.

But according to court filings made by David B. Shaev, a lawyer at Shaev & Fleischman who represents the borrower, the assignment to Deutsche Bank is riddled with problems. First, the company that Deutsche said had assigned it the mortgage, the Sand Canyon Corporation, no longer had any rights to the underlying property when the transfer was supposed to have occurred.

Additional questions have arisen over the signature verifying an assignment of the mortgage. Court documents show that Tywanna Thomas, assistant vice president of American Home Mortgage Servicing, assigned the mortgage from Sand Canyon to Deutsche Bank in October 2009. On assignments of mortgages in other cases, Ms. Thomas’s signatures differ so wildly that it appears that three people signed the documents using Ms. Thomas’s name.

Given the differences in the signatures, Mr. Shaev filed court papers last July contending that the assignment is a sham, “prepared to create an appearance of a creditor as a real party in interest/standing, when in fact it is likely that the chain of title required in these matters was not performed, lost or both.”

Mr. Shaev also asked the judge overseeing the case, Shelley C. Chapman, to order Ms. Thomas to appear to answer questions the lawyer has raised.

John Gallagher, a spokesman for Deutsche Bank, which is trustee for the securitization that holds the note in this case, said companies servicing mortgage loans engaged the law firms that oversee foreclosure proceedings. “Loan servicers are obligated to adhere to all legal requirements,” he said, “and Deutsche Bank, as trustee, has consistently informed servicers that they are required to execute these actions in a proper and timely manner.”

Reached by phone on Saturday, Ms. Thomas declined to comment.

The United States Trustee, a unit of the Justice Department, is also weighing in on dubious court documents filed by lenders. Last January, it supported a request by Silvia Nuer, a borrower in foreclosure in the Bronx, for sanctions against JPMorgan Chase.

In testimony, a lawyer for Chase conceded that a law firm that had previously represented the bank, the Steven J. Baum firm of Buffalo, had filed inaccurate documents as it sought to take over the property from Ms. Nuer.

The Chase lawyer told a judge last January that his predecessors had combed through the chain of title on the property and could not find a proper assignment. The firm found “something didn’t happen that needed to be fixed,” he explained, and then, according to court documents, it prepared inaccurate documents to fill in the gaps.

The Baum firm did not return calls to comment.

A lawyer for the United States Trustee said that the Nuer case “does not represent an isolated example of misconduct by Chase in the Southern District of New York.”

Chase declined to comment.

“The servicers have it in their control to get the right documents and do this properly, but it is so much cheaper to run it through a foreclosure mill,” said Linda M. Tirelli, a lawyer in White Plains who represents Ms. Nuer in the case against Chase. “This is not about getting a free house for my client. It’s about a level playing field. If I submitted false documents like this to the court, I’d have my license handed to me.”

The real estate firm said it has bought the John Hancock Tower for $930 million after a fierce bidding war over the signature tower. Boston Properties already owns the neighboring Prudential building.

The deal further strengthens the firm’s hold on the Back Bay office market, where it also owns towers at 101 and 111 Huntington Ave. In the battle for the Hancock, Boston Properties beat out former owner Beacon Capital Partners of Boston, Vornado Realty Trust of New York, and Fortis Properties, also of New York, among others.

The Hancock is by far the most valuable building to change hands in Boston this year, where the sales market is coming alive after extremely sluggish activity during the recession.

“The bidding was as fierce as anything I’ve ever handled during my 30 years in this business,” said Robert Griffin, who brokered the sale for Cushman & Wakefield, a real estate services firm.

Boston Properties said it would pay $289.5 million in cash and assuming $640.5 million in debt.

Although the transaction was initially marketed as a partial sale, Boston Properties is buying 100 percent ownership of the tower. The seller, Normandy Real Estate Partners, will retain management responsibilities for the next two years, as it completes renovations of the lobby and construction of an underground parking garage.

A team of Normandy and Five Mile Capital Partners bought the Hancock for $660 milllion at a foreclosure auction in 2009 after prior owner Broadway Partners missed several debt payments. Normandy has attracted several new tenants to the building, including investment powerhouse Bain Capital, which agreed to lease seven floors earlier this year. That lease increased the tower’s occupancy to more than 95 percent, putting Normandy in a better position to sell.

The 62-story Hancock Tower is one of the most notable buildings in Boston. The office building has roughly 1.7 million square feet of rentable space.

Barbara Anthony, undersecretary of the Office of Consumer Affairs and Business Regulation, said the state will examine procedures to make sure lenders are following the law. The move follows decisions by Bank of America Corp. and other major lenders to temporarily freeze foreclosures in other states over concerns that errors were made.

“The Massachusetts Division of Banks has extensive safeguards in place to ensure that homeowners facing foreclosure receive the strong protections they deserve,’’ said Anthony, adding that the state will “coordinate appropriate actions with federal and state enforcement authorities to ensure compliance with Massachusetts requirements.’’

Housing advocates and state officials have been calling for swift action to make sure foreclosures are being handled properly.

On Saturday, Attorney General Martha Coakley urged Bank of America and other major lenders to stop foreclosures in Massachusetts until they can prove they have complied with local law. The call came a day after Bank of America joined JPMorgan Chase & Co. and GMAC Mortgage, a part of Ally Financial, in a foreclosure slowdown in 23 states that carry out the proceedings in court.

Chase spokesman Tom Kelly said the lender stopped foreclosures last week after learning that some employees signed affidavits on loan documents without “personally having reviewed those files.’’ He said the lender did not stop procedures in Massachusetts because state law does not require similar paperwork.

Bank of America officials made their decision after a deposition surfaced from a bank executive who said she signed as many as 8,000 foreclosure documents a month without reviewing them. The deposition came from a lawsuit filed last year in US Bankruptcy Court in Massachusetts.

Bank of America officials declined to comment for this story.

James O’Connor Jr., the Fitchburg lawyer who represents Patricia Starr in bankruptcy court, said the testimony by the Bank of America executive exemplified an “industry practice’’ in which servicers sign foreclosure documents in bulk.

“It is a standard practice,’’ he said. “They don’t read them. They don’t know what they are signing. There is no notary present.’’

Housing advocates say that the situation may be worse in Massachusetts because lenders are making the same kinds of mistakes here, but there’s no judge to oversee the process. Foreclosure proceedings don’t require court approval in Massachusetts.

“The lenders are doing the exact same thing here that they are doing everywhere else,’’ said Paul Collier, a Cambridge lawyer who represents homeowners fighting foreclosures. “It’s the same liars telling the same lies.’’

Kathleen C. Engel, associate dean for intellectual life at Suffolk University Law School, said the recent controversy points out a weakness in Massachusetts law.

“Massachusetts is quite handicapped,’’ said Engel. “Massachusetts has essentially adopted a law that gives a free pass to lenders.’’

State Senator Susan Tucker, Democrat of Andover, said the Joint Committee on Housing recently considered a plan to require judicial review of foreclosures but tabled the discussion because of lack of funding.

“Unfortunately, it was just the beginning of the financial meltdown and it was impossible to get enough support for the kind of beefing up of the court system,’’ she said.

The validity of foreclosure procedures has been at issue in Massachusetts since 2009 after a Land Court ruling that two foreclosures in Springfield were invalid because ownership of the mortgages were not clear when the properties were sold.

The case addressed issues created during the housing boom as millions of mortgages nationwide were bundled into bonds and sold to investors, often resulting in a twisted paper trail that obscured ownership. Lenders would sometimes file final paperwork on a foreclosure sale, including validating ownership, after the deal was completed. The Supreme Judicial Court is expected to hear oral argument on the case this week.

Collier, who represents one of the homeowners in the Land Court case, said this week’s hearing relates directly to current questions about the foreclosure process. “It is the same kind of document falsification process that is being exposed,’’ he said.

The discussion comes as foreclosures continue to rise in Massachusetts. In August, 1,207 owners lost their homes, an 83.2 percent increase from the 659 reported during the same month in 2009, according to Warren Group, a Boston company that tracks local real estate. During the first eight months of the year, 9,887 owners lost their properties to foreclosure — surpassing the 9,269 completed foreclosures recorded during all of last year, the group said.

Patrick signed the law at a single family home in Brockton that was foreclosed on but then rehabilitated by a local affordable housing agency and placed on the market.

“Even as Massachusetts continues its economic recovery, thousands of families are still dealing with the effects of foreclosure and they need immediate assistance,” Patrick said in a press release. “Combined with the 2007 comprehensive foreclosure law, we are redoubling our efforts to address the foreclosure crisis.”

The new law bars bankers and lenders from issuing wholesale eviction notices to tenants in foreclosed buildings. Under the law, tenants can only be evicted for just cause, like not paying their rent on time or other violations of their lease.

For homeowners, the new law temporarily extends an existing 90-day cooling off period designed to give property owners and their lenders time to negotiate new terms to a mortgage to help avoid a foreclosure. The new law extends the period to 150 days.

The cooling off period can be reduced back to 90 days if the lender makes a good-faith effort to work out a reasonable alternative to foreclosure.

In an effort to protect older homeowners, the new law requires those who want to obtain a reverse mortgage on their home to meet with a counselor approved by the Executive Office of Elder Affairs. It also criminalizes residential mortgage fraud.

Housing advocates have long pushed for the added safeguards, especially for tenants, who often find themselves caught between a landlord facing foreclosure and a bank that wants to empty a building of existing tenants to make it easier to resell.

Without the new law, tenants could be evicted by a bank even if they had a lease and had been paying their rent on time, according to Lew Finfer of the Massachusetts Communities Action Network, a group of community improvement organizations.

“A lot of tenants immediately get a notice saying we want you out,” he said. “It’s a huge hardship to have to move and pay a new rent and a security deposit.”

Bankers and real estate agents say the bill is much improved, compared to an earlier version which they said would have stripped away too many of their rights.

Gregory Vasil, the CEO of the Greater Boston Real Estate Board said once a building is foreclosed on, the goal is to get it back on the market and into productive use as soon as possible.

“Nobody wants them to sit vacant,” he said.

He said the final version of the bill would still allow a building owner who is facing foreclosure, but is able to negotiate a purchase and sale agreement with a new buyer, to evict tenants. But once the lender or bank takes control of the property, tenants could not be evicted.

Local banks have been closely monitoring the new law’s requirements, including a provision that gives property owners up to 150 days to negotiate new terms of a mortgage, according to Jon Skarin, director of federal policy for Mass Bankers Association.

“Because many of the provisions (of the law) kick in immediately, it is going to cause some confusion in the market,” said Skarin. “Our members have been scrambling to try to comply with the law.”

Lawmakers said the legislation was designed not just to help individual homeowners and tenants, but to fend off blight that can come from too many foreclosed properties in a single area.

“When a property lays vacant and abandoned it is an invitation to drug addicts and vandals, and can be a general eyesore to a whole neighborhood,” said House Committee on Ways and Means Chairman Charles Murphy, D-Burlington.

The bill also creates a new property tax exemption that lets a charitable organization that acquires a foreclosed property — and plans to create low and moderate income affordable housing there — to be exempt from property taxes until it rents or leases the property.

The exemption would expire seven years after purchase.

The new law comes as the state continues to struggle with high numbers of foreclosures.

There were 1,313 foreclosure deeds recorded in Massachusetts last month, compared with 628 in June 2009, according to The Warren Group, an independent publisher of real estate data.

And as NPR’s Anthony Brooks reports, the foreclosure crisis is now deepening in states like Massachusetts, places that were initially spared the worst of the real estate collapse.

ANTHONY BROOKS: Paul Collier is an attorney in Cambridge, Massachusetts, who represents homeowners facing foreclosure. Collier says these days he’s busier than ever.

Mr. PAUL COLLIER (Attorney): The financial conditions that created this meltdown and the legal conditions that created the meltdown are still there.

BROOKS: Last month, banks took more than 1,300 Massachusetts homes – more than double the rate of the same period last year. That, according to Timothy Warren, CEO of the Warren Group, who tracks real estate in Massachusetts.

Mr. TIMOTHY WARREN (CEO, Warren Group): Foreclosures are at high levels right now. People are entering foreclosure at a very high rate. And, you know, that indicates a certain level of economic distress and that we’re probably going to be facing that for some period of time.

BROOKS: The historically high foreclosure rates are due in part to banks working extra hard to get those non-performing loans off their books. In other words, they want to close out the bad loans and resell the homes to people who can afford them.

Beyond that, Aaron Gornstein, who heads an affordable housing advocacy group in Boston, says the unemployment rate remains stubbornly high.

Mr. AARON GORNSTEIN (Director, Citizens’ Housing and. Planning Association): People are losing their jobs or have reduced work hours. We have a lot of people in the construction trades that are unemployed – close to 40 percent. So those people are falling behind on their mortgage. They can’t keep up and, as a result, they’re going into foreclosure.

BROOKS: Joel Searby agrees and says the high foreclosure rate has more to do with the tough economy than with the fallout from the subprime mortgage crisis. Searby is with a Florida research company that polled 500 Pennsylvanians who lost their homes to foreclosure, and asked them why.

Mr. JOEL SEARBY (Pollster, Strategic Guidance Systems): Forty-one percent had a prime, fixed-rate loan, while only eight percent had a subprime adjustable loan. The most significant finding is that those experiencing foreclosure experience job loss in a combination. That is, they didn’t just simply lose their job, they lost their job and then something else happened.

BROOKS: Something like medical bills, divorce or a relative moving in. He says the message is that foreclosures are tied more closely to bad economic conditions than to the type of loan. Searby says he found the same results in Florida and Nevada, two states hit the hardest by the real estate crisis.

According to a recent RealtyTrac report, in the first half of this year, the number of foreclosures went up in three-quarters of the largest U.S. metropolitan areas, compared with a year ago.

Mr. COLLIER: And until we do something about it we are going to be unable to resolve the current economic crisis.

BROOKS: Again, Cambridge attorney Paul Collier. He says foreclosures not only hurt millions of individual homeowners, they destabilize neighborhoods and drag down housing prices.

Collier says federal initiatives that encourage banks to rework loans and avoid foreclosures are too weak because they’re basically voluntary. But he says it doesn’t have to be that way. Collier points out that in the wake of the 1930s Depression, some states enacted tough measures to compel banks to lower monthly payments, and that dramatically reduced foreclosures.

Mr. COLLIER: States like Kansas and Iowa simply adopted mandatory mediation. That is, every lender had to sit in a room with a professional mediator and a homeowner and discuss modification of that loan. And foreclosures went down within 20 months of the passage of that bill by 94 percent.

BROOKS: In the absence of that kind of legislation, it might help if more Americans facing foreclosure knew about state and federal programs that could help them, programs that provide incentives to rework loans and lower monthly payments.

But Joel Searby – who did the polling on those facing foreclosure in Pennsylvania – found that a majority of those surveyed didn’t know how or where to get help.

Mr. SEARBY: There’s no doubt that there’s been a disconnect between what the federal government and state governments have been offering and what these folks who are experiencing foreclosure are needing.

BROOKS: So until that changes or until the economy dramatically improves, the number of foreclosures will likely continue to rise in the months ahead.

Anthony Brooks, NPR News.

Warren, MA 01083

3 Bd | 1 Ba | 2,304 Sq. Ft. | Single Family

Foreclosure Status: Foreclosure Auction (NFS)

County Worcester CountyType Single Family ResidenceBeds 3Baths 1Square Feet 2304Lot Size 18100