Despite Foreclosure Turmoil Maryland Still Considered a Safe Haven

The rates of foreclosure increased drastically this spring, thereby breaking all records of the last three decade’s rates. Nevertheless, the increase in foreclosure rates was quite low in Maryland.

The Mortgage Bankers Association (MBA) recently released their data focusing on how the burden of sub-prime loans on the homeowners is affecting the financial condition nationally. In the second quarter of this year, foreclosure filings increased by 0.65 percent i.e. sixty five foreclosure for each 10,000 loans extended. The rate of residential delinquent loans leaped by more than 5.1 percent of the total 44.1 million loans across the country, thereby increasing the loans taken in the spring last year by 4.38 percent.

The incidence of foreclosure has been relatively less in Maryland compared to the other states. The number of loans experiencing foreclosure in Maryland is 0.37 percent. Out of the total 1 million loans extended to the homeowners, 3756 loans received foreclosure notices between the month of April and June this year. On a non adjusted scale (when the figures are not adjusted every season), the new foreclosure rate in the US is 0.60 percent, as per the records of the MBA.

In Maryland, the percentage of new foreclosures was lower. However, the growth in new foreclosures was high. The prime reason for the increase in the foreclosure filings on daily basis is the growing number of default payments, as mentioned by Doug Duncan, the chief economist of the Banking Association. He said that many home buyers took loans on adjustable-rate-mortgage with low interest rates when they started. However, due to increase in the rates later, they were unable to pay the monthly payments.

Now, when the housing market is very down, they are finding it difficult to sell off their homes. Overall housing prices have also gone down tremendously. This makes the refinancing of the house, to save it from foreclosure, very difficult.

These adjustable-rate mortgages are prevailing more in the states of California, Nevada, Florida and Arizona. Same is the case in Maryland. Executive director of Civil Justice Inc, Philip R. Robinson, said that most of the data on foreclosures and delinquencies is contradictory. But, he said, that from the cases which come to him, the number of homeowners losing their house to foreclosure are increasing at a steady rate.

Despite all this, the situation in Maryland is far better as the housing prices are still at pretty high levels when compared to other states.

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