The state of Maryland took the lead in foreclosures this spring toppling states like Florida, Arizona, and California, which got hit the worst by the foreclosure crisis.
A new study conducted by the Mortgage Bankers Association showed that nearly 2 percent of homes in Maryland were put into foreclosure between April and June, making it double that national foreclosure rate.
Experts are warning homeowners that home prices will be affected as 5 percent of Maryland homes are in some stage of the foreclosure process.
Darren Blomquist of RealtyTrac said, “Typically those (foreclosure sales) are at a discounted price and those could drag down prices overall. There is a concern that this could weaken any nascent recovery that may be in the housing market there.”
National foreclosure rates rose this year over 2011 after major banks resolved investigations into their servicing practices. Many lenders held off foreclosure actions until the national lawsuit was resolved, making the foreclosure rate in Maryland and Virginia experiencing an uptick.
Maryland is a judicial foreclosure state which typically takes longer, slowing down the foreclosure process. Additionally, the state passed a law in 2010 which requires lenders to enter into mediation before they can seize a home.
Other states have followed Maryland’s lead also requiring mediation, but critics say these laws merely cause a slower housing sector recovery because of delayed foreclosures. Some studies have shown that mediation and housing counseling are effective in lessening the number of foreclosures in a community, preventing home prices from dropping.
Foreclosure is a daunting prospect and many homeowners are unaware of their options for losing their homes. A foreclosure attorney can assess the homeowner’s current financial state and determine if they are eligible for a loan modification or short sale, as well as personal bankruptcy if it is a better option.
