Are Hard Mortgage Foreclosures Hitting Hard North East Counties?

Posted in General, Mortgages, May 31st, 2007 |

Mortgage defaults sweeping across the entire country for the last six months has not spared northeast Baltimore County.

There are many local realtors who differ on this point as to the severity of the problem of foreclosures in the northeast region stretching from Baltimore city lines to Harford County.

Êone, the head of major real estate organization says that the local foreclosure listings are far less than the national average. It has risen about 12%, she admitted. Nevertheless, she admits that more and more people are opting to sell their homes because they can no longer afford to repay installment dues. Two other professionals echoed her sentiments saying that the region had only a slight fall in numbers as compared to national figures. It was nothing much to crow about.

Goodman representing a reporting service says that Circuit Court in Towson for the last year shows a foreclosure listing of 1,987 – that is a 12% increase during the time period of a year.

Mortgage lenders can legally sell a house once the payments fall behind four months. Why is this happening?

Many young people below the age of thirty-five are living beyond their means. Another group is of the opinion that divorce rates are rising making it impossible for one person to manage the financial responsibilities. Put the other way – are foreclosures leading to divorces? It is a vicious circle where the roof above the head is at stake. A rise in delinquency is the obvious outcome. Broken marriages, loss of jobs and major illnesses are the prime causes for foreclosures.

Homebuyers should avoid loans with high rates of interest. During four years starting from 2002 there was a boom in the real estate market with rising prices. During that time the owners of property could easily meet their commitments and have something left over by selling their houses. But a boom cannot last forever. It is the natural law. The bubble has now burst.

During March there was slight rise of 3% in sale prices for both Baltimore and Harford counties. But this is applicable to only some houses. Many are finding that their houses are worth less than the amount, which they have to pay to the lenders on the mortgage. This situation is termed ‘negative equity’. The house owner does not have any escape route. The only alternative is foreclosure.

Via