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Maryland foreclosure crisis is holding steady

By Melody Simmons Daily Record Business Writer One in every 1,503 Maryland housing units received a foreclosure notice last month, according to new data by RealtyTrac. The figures reflect that the housing crisis that has swept the U.S. over the past three years is holding steady as the effects of the Great Recession continue to be felt. Overall, 14,916 Maryland homes were in foreclosure in January, down 4.71 percent from December and 70.2 percent from January 2010, the figures from RealtyTrac show. The average foreclosure sales price was $207,899. Nationally, foreclosures in January increased 1 percent over December 2010 figures, said the U.S. Foreclosure Market Report by RealtyTrac, a service that compiles monthly national and statewide foreclosure statics. Overall, there was one foreclosure filed for every 497 housing units in the U.S. last month, for a total of 78,133 properties. In addition, foreclosure auctions were scheduled for 108,002 houses last month, the study said. The top five states with foreclosure filings were California, Florida, Michigan, Arizona and Illinois. RealtyTrac researchers said that while those numbers seem high, the January 2011 figure was a 17 percent decrease from the January 2010 data. But local housing experts warn against optimism. “We should be expecting more foreclosures because the lenders have filed for state mediation, so we’re trying to be prepared for more here,” said Mark Benson, acting executive director of St. Ambrose Housing Aid Center in Baltimore, where foreclosure assistance has helped thousands of families over the past three years. Benson said statistics from the Maryland Department of Labor, Licensing and Regulation show that more foreclosures are on the horizon because banks are poised to move as soon as mediation efforts, mandated by state law that began in July, run their course. “The lenders have filed for it [foreclosure] and it could spur some people to come in and ask for help,” he said of the need for homeowners to reach out to try and save their homes from foreclosure. Maryland’s 24 counties reported varying levels of foreclosures last month. RealtyTrac figures show that the highest levels were in Prince George’s County, where 705 new foreclosure filings were made last month — or one in every 456 homes. In Montgomery County, there were 157 foreclosure notices filed last month. Baltimore had 140 filings and Baltimore County reported 117, the figures show. Tate M. Russack, a bankruptcy attorney with the firm of Russack Associates LLC in Easton and Annapolis, said he handled 218 bankruptcy cases last year — and 75 percent of those included a foreclosure. The crisis, Russack said, is nowhere near ending, and the personal toll is harsh. “A lot of clients got in over their head in the housing market,” he said, of the huge bankruptcy caseload. “Until we clean out the loans that are unpayable, we can’t be out of it. We can’t have a level property market. It’s always going to be up and down. The Bowie house with a two-car garage that cost $900,000 — you have to get rid of those before you start to see an upturn in the economy.” Russack said pending foreclosures stalled in the Maryland home mediation system have potential to jam the system in the upcoming months when mediation ends. “I have heard that come April, the gates are going to open and the foreclosures are going to start in earnest,” he said. “We all know it has to start because there is a glut of properties out there that are going to be foreclosed on. Sixty percent of all real estate in Anne Arundel County was underwater … and of those 30 percent were not performing, meaning no payments were being made. Run those numbers by the number of houses in the county and you’re talking thousands. And there’s no relief for the homeowners, so people will have to fend for themselves.”

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