RealtyTrac LLC, the real estate market data company, recently released its foreclosure figures for May. There is not much good news for Maryland: With a 229 percent jump, the state logged the largest year-over-year increase in foreclosure starts. The foreclosure rate of 1 in every 587 homes, a 33-month high, put Maryland in fourth place among the 50 states and the District of Columbia; it also marked an 11 percent increase over April and a whopping 134 percent rise from May 2012.
The trend is disturbing, given that only 14 states reported year-over-year increases in May. Maryland’s increase in foreclosure starts was more than double the increase of the next state in line. We seem poised to take the top spot by the end of the year.
Real estate professionals offer a few explanations. One Baltimore housing attorney suggests that more homes in foreclosure these days are investment properties than owner-occupied properties. That does not mean, he adds, that individual homeowners are not struggling.
Others point to changes in Maryland’s foreclosure laws that took effect early in the crisis. As one state official explained it, the foreclosure process, from filing to repossession, could happen lightning-fast when the housing bubble burst. The General Assembly and the governor adopted processes that had more homeowner protections built in.
The new laws put the brakes on the foreclosure process by extending the number of days a lender must wait before putting the home up for auction, by making more mortgage counseling services available and by instituting a mediation program. For many distressed borrowers, though, these changes just prolonged the painful process of losing their homes, according to RealtyTrac.
How can that be? We’ll explain in our next post.
Source: The Baltimore Sun, “Md. foreclosure activity high despite recovering market,” Steve Kilar, June 22, 2013