The Boston Globe reports on rising defaults in the state. "Foreclosure filings against Massachusetts homeowners increased 30 percent in the first three months of 2006 and have doubled in the past three years, as homeowners in one of the nation's most expensive real estate markets struggle to cope with high prices and rising interest rates."

"Rising interest rates and a softening real estate market have put a squeeze on homeowners who sometimes can't make the higher payments on adjustable-rate mortgages or refinance their loans to lower their payments."

"'These are numbers everybody should be paying attention to,' said Thomas Callahan, executive director of the Massachusetts Affordable Housing Alliance. 'There are things that could happen like further increases in interest rates and or more serious decreases in [house] values that can make this a lot worse than it is now, and it's pretty bad right now.'"

"In the first three months of the year, lenders filed notices against 3,762 Massachusetts borrowers who were at least 30 days delinquent on their mortgage payments. That is more than double the 1,858 filings in the first quarter of 2003, when the housing market was booming."

"'We have seen a real increase in numbers of foreclosures in Boston,' Mayor Thomas M. Menino said yesterday, noting that the city has recorded 58 foreclosures so far this year, almost as many as the 60 filed for all of 2005. 'The sky isn’t falling yet, but it’s really a cause for concern.'"

"'We've got to stop having these mortgage companies give these loans out for people who shouldn't get loans,' Menino said."

"Rates on these loans are fixed for one, three, or five years and then begin to float. Often that floating rate is based on the prime lending rate, which has increased to 7.75 percent, from just 4 percent a year ago. The stagnant real estate market compounds the problem. With housing prices stabilizing or falling, the refinancing option is not available."

"'The forces behind the erosion in the quality of credit are powerful and numerous,' said economist Mark Zandi. Zandi said it is especially troublesome to see foreclosures on the rise 'at a time when the job market is very strong,' he said."

"Mortgage problems are cropping up in a variety of loans, association data show. High-rate subprime loans exploded during the housing boom and have among the highest delinquency rates: 12.6 percent were past due at the end of last year in Massachusetts, up from 10.4 percent a year ago."

"Yet, Massachusetts' delinquency rates are below those in other parts of the country, such as Florida, where real estate speculation is widespread."

"Douglas Duncan, chief economist for the Mortgage Bankers Association, predicted delinquency rates will continue to rise. US mortgages had a record volume in 2003, and most loans become delinquent in their first three to five years, he said. 'You're going to continue to see delinquencies rise in Massachusetts for the same reason as the rest of the country,' he said."