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Boston Foreclosures Up in March

I bet Boston real estate attorneys didn't expect this.

According to Boston-based real estate tracking firm The Warren Group, the number of foreclosures actually went up  in the days of the federal tax credit.

The tax credit I'm referring to is the Federal First Time Homebuyer's Tax Credit.

I guess it would have been logical for Boston real estate lawyers to assume that home sales would go up in light of the tax credit and as a result, foreclosures would drop.

But using that logic, it actually makes sense for banks to foreclose aggressively, if they know that there may be hordes of willing homebuyers.

The surge in foreclosures posted numbers that hadn't been seen since the height of the foreclosure crisis, back in 2008.

According to The Warren Group, the number of homes taken back by lenders in the month of March 2010 was 1,300. This was more than 50 percent higher than the month of February.

Over 2,500 lenders filed petitions to initiate new foreclosure processes, which was a 20 percent rise from February.

The tax credit was intended to provide a boost to the economy. I imagine that the thought of surging foreclosures was certainly counterintuitive to the Obama Administration's plan.

While some argue that the concept of taking homes out of the hands of distressed homeowners and placing them into the hands of those who can pay is actually a boost for the economy, several argue that the federal tax credit is artificially inflating home prices for those who bought during the height of the tax credit.

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