Financial and housing experts have just been waiting for the other shoe to drop in Maryland’s foreclosure crisis. We wrote about “delaying the inevitable” in June when RealtyTrac released foreclosure numbers for May. With the arrival of more recent data from RealtyTrac and other companies, the state heard a big, loud thud in early August.
The feeling of dread set in in 2010, when mortgage servicing companies and lenders took a break from foreclosures to turn their attention to documentation issues. The moratorium ended last year when the state attorneys general reached a settlement with the lenders and servicers, who promptly turned their attention to the foreclosure backlog that had built up. The backlog was particularly high in judicial process states like Maryland.
The upshot is that in January Maryland had one of the lowest foreclosure rates in the country. The state now has the third highest foreclosure rate. During the first quarter of 2013, lenders filed 9,339 foreclosures in the state, twice the number of filings for the same period in 2012.
If there is any good news, it is that the spike is still well below the fourth quarter 2009 high of 16,788 filings. Fifty thousand homes went into foreclosure that year.
For seriously delinquent homeowners there is one more hint of good news: The state also has one of the longest foreclosure timelines in the country. It takes an average 575 days to complete a foreclosure here. Neighboring Virginia can complete its non-judicial foreclosure process in 184 days — barely enough time for a homeowner to realize what’s going on, much less look for a solution.
The Maryland housing market is in a strange kind of limbo right now, with the “echo” foreclosure crisis on the one hand and improving home prices on the other. We’ll talk more about that in our next post.
Source: Washington Post, “Thousands of Marylanders are losing homes in second wave of foreclosures,” Annys Shin, Aug. 11, 2013