Friday, July 15, 2011

MD Daily Record: Maryland foreclosures fall, but news isn't good

"Maryland foreclosures fall, but news isn't good" by Maryland Daily Record

Foreclosures on Maryland properties in the first half of this year fell more than 68 percent compared with the corresponding period in 2010, an extreme example of a nationwide trend, foreclosure listing company RealtyTrac Inc. said Thursday.

But the decline, which resulted from delays in foreclosure processing, may not be good news for homeowners, instead indicating that the housing market is far from recovery.

Foreclosures nationwide fell 29 percent from the first half of 2010, with June marking the ninth straight month where foreclosure activity decreased. Maryland's decrease was the second steepest in the nation, following only Washington, D.C.

"It really unfortunately is an artificially low number, and does not indicate that the housing market is improving," said Rick Sharga, a senior vice president at RealtyTrac. "A lot of foreclosure activity has just been delayed. Ultimately, those foreclosures will hit. The question is when, not if."

Sharga said the delays may push the housing market's recovery out to 2015, a year beyond previous predictions. Maryland, he said, may recover earlier because it was not hit as hard by the housing market crash as many other states.

"It's possible Maryland could come out a little earlier than the rest of the county," Sharga said. "Maryland had some trouble with the housing market, but it wasn't as insane as it was in places like California. The wave of foreclosures now is being driven mostly by unemployment, and Maryland's unemployment rate isn't as high as some other states."

James Saccacio, chief executive officer of RealtyTrac, said the delays in processing may push as many as 1 million foreclosure actions that were scheduled for this year to 2012 or beyond.

"This casts an ominous shadow over the housing market, where recovery is unlikely to happen until the current and forthcoming inventory of distressed properties can be whittled down to a manageable number," Saccacio said in a statement.

Maryland's steeper decrease may be due more to political and social factors than economic ones, said Daraius Irani, director of the Regional Economic Studies Institute at Towson University.

"Maryland is much more of an activist state," Irani said. "It has more consumer interests at heart than maybe some other states would, and its rigorous control requirements are being put into effect and slowing things down."

Although Irani also said Maryland may recover sooner than many other states, he said the housing market will continue to struggle both locally and nationally.

"Until the market settles down and finds the bottom, which I still don't think it's done, all we're doing is postponing the inevitable for the next three to four years," Irani said.

Banks foreclosed on 421,212 homes nationwide in the first half of the year, down from 529,633 in the first six months of 2010.

In Maryland, Prince George's County was hit the hardest with foreclosure notices, with 1.04 percent of all housing properties receiving one, followed by Charles and Frederick counties at 0.5 and 0.42 percent, respectively. Garrett County had the lowest rate at 0.06 percent. The rate in Baltimore City was 0.33 percent, and Baltimore County's rate was 0.25 percent.

Maryland homes receiving foreclosure-related notices over the last six months totaled 8,905, down from 28,293 between January and June of 2010, according to RealtyTrac. The total nationwide was 1.2 million homes.

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