Banks Move Fast To Remove Foreclosed Properties From Portfolios

November 26th, 2007

The threat of increasing number of foreclosures in Maryland real estate seems to have almost doubled during the last few months in a most disturbing way. The latest data on the figures of foreclosures in real estate at Maryland has stirred a hornet’s nest and prompted not only the lawmakers but the lenders as well to propose a 135-day minimal period to be maintained between a session of default as well as a foreclosure sale.

The spiraling figures aren’t imaginary at all. The spike is very real because RealtyTrac, has pinpointed to the fact that over 7,000 homes were foreclosed by lenders during the third quarter. In fact, this is fast spreading across like a wild, prairie fire to even those counties that had been previously unaffected by this troublesome issue of foreclosures. Experts who are reviewing the trends in real estate believe that improvement doesn’t seem likely anytime soon.

For a long while, the Baltimore area had not done too badly despite the turmoil in mortgage sphere during the recent months. However, the statewide statistics relating to foreclosures remain at a whopping figure of 491 percent. That doesn’t sound too rosy, does it?

A rather disturbing fact is now being pointed out by realtors as well as lenders. The fact is that most of the banks prefer not to keep the stocks in their books anymore. They strongly prefer to sell off the stocks of such homes as they aren’t too familiar or comfortable in the real estate dynamics of being responsible homeowners. After all, the nature of banking is all about the dynamics of lending. As a result, a lot of the banks aren’t willing at all to maintain or keep a portfolio of those properties in real estate that are already foreclosed. It is an established fact that the bank’s group of investors don’t see any point in holding on to such portfolios of properties that are foreclosed so its considered the most unwise thing to do in banking circles.

A fact to remember is that when there was a tremendous real estate boom just a few years back, the foreclosure sales for this area hadn’t been sky high. In fact, the figures spanned $100,000 or even lesser than that. But it is a different fact that foreclosure spike is currently spreading to all levels so it isn’t easy at all to make a good sale in real estate.

Till things simmer down, it’s important for everybody – lenders, bankers, and investors, homeowners – to have more fortitude.