SPRINGFIELD - There were two cars parked in front of 144-146 Prospect St. Friday morning; one of those cars sported a bright red banner that said "AUCTION."

"The property isn't foreclosed until I say 'Sold,'" said auctioneer Paul J. Traverse of Traverse Real Estate in Milton.

And that's exactly what happened about 90 seconds after the auction began without even the clap of a falling gavel. There was a single bidder at the sale.

The mortgage holder, LaSalle Bank NA, purchased the three-family home on a residential street a few blocks from Mercy Medical Center for $101,250.
"They need to protect their interest," said Ronald J. Marcella, an auctioneer from Dalton who represented LaSalle at the sale.

According to records at the Hampden County Registry of Deeds, the now-former owner, Moses Njenga, of Lowell, took an $184,000 mortgage on the property in 2005 when he bought it for $230,000. Njenga didn't return a call for comment in the wake of the foreclosure auction.

Nearly 3,000 Massachusetts homeowners had their property foreclosed in the first quarter of 2008, according to a study released Thursday by the Warren Group, a provider of real-estate data for New England. There were 1,167 foreclosure deeds filed across the state in March, more than twice the number - 486 - recorded a year ago. It was also up from the number recorded this February, which was 860.

"The number of people losing their homes to foreclosures shows no sign of abating," said Timothy Warren Jr., chief executive officer of the Warren Group. "The last time more than 1,000 foreclosure deeds were filed during one month was in August 2007 when 1,018 were filed," Warren said.

"We hope that represented something of a peak, but March's numbers have shown us that Massachusetts' foreclosure problems continue to worsen. With steady increases in petitions, I don't see this problem going away any time soon."

There were 560 foreclosure auction announcements in Hampden County through March, representing a 77.8 percent increase during the same three-month period a year before. In Hampshire County, there were 24 foreclosure auctions, down six from the first quarter of 2007. Franklin County bucked the trend with 11 auctions in the first three months of 2008, down from 39 auctions in the same period a year before, also according to the Warren Group which also publishes Banker & Tradesman.

"I have 50 auctions scheduled in May," said Traverse, who works around the state. He said he used to see one property owner with several investment or business properties go into foreclosure on several properties.

Attorney David W. Young, of Agawam, said he's watched the numbers of foreclosures rise. "The courts are backed up because of the volume," he said.

Young, who also handles some foreclosures as an auctioneer, said he's not busier because he handles foreclosure sales for just a few local and regional banks. Instead, the increase is really coming from out-of-area lenders who offered a lot of mortgages to borrowers who didn't have the means to pay them back, Young said.

Owners are typically three or more months in arrears before the lender starts the foreclosure process, according to Young.

Mary R. Pennicooke, of Springfield, said she got a foreclosure letter from her lender in February. Pennicooke said she bought a house in Springfield two years ago with $18,000 down. Since then, she's lost her job and the payments on her adjustable-rate mortgage have gone from $1,200 a month to $1,600. "I wasn't earning $1,600 a month," she said.

Hina S. Sheikh, a head organizer with ACORN Housing Corp. in Springfield, said she's seen people's adjustable-rate mortgage payments go from $400 a month to $1,600. "They came in with these low teaser rates," Sheikh said. "A lot of people didn't know what they were getting into."

ACORN, a local branch of a national organization, helps consumers refinance their loans and avoid foreclosure.

Shepard D. Rainie, executive vice president and chief risk officer for Berkshire Bank, said his bank has no pending foreclosures in the Pioneer Valley. But, he noted, foreclosures might occur as economic conditions deteriorate, particularly if people lose jobs. High energy prices have also added to the economic pressures facing homeowners, Rainie said.

Traverse said some people come to foreclosure sales looking for places to live. But, he cautioned, it can be a tricky way to buy a home. For one thing, lots of auctions get canceled at the last moment because the borrower sells, refinances, declares bankruptcy or finds another way to halt the foreclosure.

Also, buyers at auctions don't typically go inside before the sale nor does anyone get a chance to make an inspection.

The buyer must put up a deposit, typically $10,000, and if they can't come up with the rest of the money or can't get a mortgage within 30 days, the deposit is gone. Buyers at auctions also "inherit" the tenants that come with multi-family homes, if there are any along with any back taxes, water and sewer bills.

"I tell people to check everything out at town or city hall," Traverse said. "Look at when the mortgage was dated. If that's two years ago, figure two years of back taxes. If they aren't paying the bank, they aren't paying the city."

Banks that buy back the property at sale will typically work with a real estate agent to sell the property conventionally after having it cleaned and hopefully at a higher price, Traverse said.

Warren M. Schreiber, owner of Biff-Way Auctions Inc. in Belchertown said foreclosed properties can range from deplorable to move-in condition.

"That's often a case where it was on the market with a real-estate agent," Schreiber said. "They just ran out of time."

By : JIM KINNEY