Foreclosure rates are skyrocketing in Maryland, according to reports obtained and reviewed by the News4 I-Team, and the state’s efforts to protect homeowners could be fueling the problem.
A county-by-county breakdown of home seizure rates produced by industry analysts at California-based RealtyTrac, and shared with the News4 I-Team, show Montgomery, Frederick and Howard counties each suffered from 100 percent increases in home foreclosures between autumn 2012 and autumn 2013. There was a 50 percent increase in Prince George’s County. In Anne Arundel County, the spike is much larger: 400 percent.
“This is just the beginning of the wave of foreclosures,” RealtyTrac analyst Darin Goodwin said. “There are homes that haven't hit the housing market yet.”
Realtors and foreclosure assistance groups said the increase is alarming, but not surprising. Maryland law creates a slower foreclosure process than neighboring states, requiring home seizures be processed by courts before completion. What’s more, recent investigations into the legality of how some banks process foreclosures convinced some Maryland lenders to pause foreclosures for months or years, industry analysts said. The backlog of seized homes is just now beginning to clear.
On the steps of the Montgomery County Courthouse in Rockville, News4 I-Team cameras captured images of one of the dozens of recent home auctions outside local courthouses. Auctioneers contracted by Montgomery County disposed of more than 10 foreclosed homes in an hour. A Gaithersburg townhouse, located about one mile east of Route 355, was purchased for $210,000, about 30 percent less than the estimated price of neighboring homes. The man who purchased the home declined to share his name but said he was an investor who didn’t plan on living in the home.
In Prince George’s County, civic leaders have asked Maryland state officials to place a moratorium on foreclosures, citing the impact of the recent surge on families.
Ann Lytle, of Capitol Heights, is trying to escape the foreclosure of the Addison Road home in which she’s lived for 65 years. Lytle said she’s fought a yearlong battle with her bank, which she said was triggered by a dispute over a missed monthly mortgage payment. “It’s like somebody took a nail and drove it through your heart,” Lytle said. She’d taken out a new mortgage on the house in 2009 to help pay for repairs and remodeling.
Maryland housing officials said the recent increase in seizures is not a sign of a new foreclosure crisis but is instead the completion of the nationwide housing crisis triggered by the 2008 economic downturn.
Maryland Department of Housing and Community Development secretary Raymond A. Skinner said the state’s slower foreclosure process protected families at the outset of the recession. In a statement to the News4 I-Team, Skinner said, “The State's comprehensive response to the housing crisis has been more effective than other states in the region, including investments in counseling and legal services that have enabled homeowners to achieve loan modifications and refinancing at levels far exceeding neighboring states.”
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