Maryland in the Grips of Foreclosures

Posted in Foreclosure, May 27th, 2007 |

The Economist reports that so far the foreclosure listings at Maryland, Baltimore, had been the lowest in the country but the future looks gloomy with the passing of each day. Anirban Basu, Chief Executive of Sage Policy Group, opines that passions are rising as real estate sharks are eyeing downtown property deals. So far the apprehensions have not turned into actual reality but the writing is there on the wall for all to see what the future has in store. The worst days seems to be ahead and not behind.

Basu, in a talk with The Baltimore Examiner said that the increase in housing stock in Maryland is because of the resettlement of adjustable mortgage rates. Most of the people are unable to meet the new high demands in interest payments. This however is not the sole reason. People have been reckless in their debt dealings with not only their property but with their cars etc. The credit card has gobbled up all avenues leading to an increase to delinquency. The loan culture is beginning to take its toll. All these reasons have combined into the snowballing effect of rising foreclosures. Basu further goes on to add that the regulatory environment is no longer stable but is shifting. Borrowers can longer assess credit according to the 2002-03 scenario. The picture has totally changed and continues to do so. The sub-prime market has shut down to all real practical purposes. If the economy of the state further slows down then unemployment and discontent will vitiate the atmosphere and make the foreclosure markets look murkier.

Till now Maryland has escaped the rising tide of foreclosure listings in both prime and sub-prime markets that are lashing other regions in the country. A look at the statistics will bear facts. Maryland’s foreclosure listings rate of .5% and new foreclosure rate of .31% are still much below the national average of 1.19% and .57%. This is the view of Dough Duncan, Chief Economist and Senior Vice President of Research of Mortgage Bankers Association.

The Maryland Bankers Association is of the opinion that till now 70% Americans were owners of their homes but with the runaway rates of interest and regulations they will no longer remain in the comfortable position.

The ultimate outcome will be that an economic problem will become a social time bomb.

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