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Maryland still mired in high foreclosure rate

Maryland retained one of the highest foreclosure rates in the nation last month.

In January, the state posted a foreclosure filing for every 690 housing units. That ranks third in the nation, trailing New Jersey and Nevada and followed by Florida and Delaware, according to real estate data firm RealtyTrac.

In Maryland .14 percent of homes were foreclosed on in January, which is twice the national rate of .07 percent.

The Old Line State was also one of the nation’s leaders in year-over-year increases in foreclosed properties that didn’t sell at auction or otherwise reverted back to the lender.

Maryland experienced a 72 percent uptick in the number of properties in that category. It followed a 263 percent increase in the same category in New York; Texas jumped 198 percent; New Jersey increased 132 percent; and Georgia went up 76 percent.

Positives in RealtyTrac’s figures include January’s foreclosure filings decreasing 15 percent from December. The number of foreclosure filings year over year also dropped 9.5 percent.

Maryland’s foreclosure rate in recent years has been stubbornly high and has remained at or near the top of the rankings.

In the last two years, experts have predicted the foreclosure rate in Maryland would eventually fall. That argument followed the logic that actions taken by the Maryland General Assembly after the housing bubble burst and the 2008 financial crisis created a backlog of foreclosures, which should now finally be working through the system.

That hasn’t happened yet. In October, when Maryland had the highest foreclosure rate in the nation, RealtyTrac found that 60 percent of foreclosure filings in Maryland were on loans that originated between 2004 and 2008. That indicated measures taken by the state to keep residents in distressed homes only delayed the inevitable.

Foreclosures have an impact on the larger housing market because a glut of these homes drives down prices overall.

Joseph T. “Jody” Landers III, a Realtor at PenFed Realty, expressed surprise the foreclosure rate has remained so stubbornly high in the state.

He said it may be the result of people still underwater in their mortgages who just give up on a property.

Often homeowners who bought at the peak of the market, Landers said, are stuck with homes not worth what they purchased them for several years ago. There’s just not enough demand for these owners to sell and break even on a deal.

“The prices are still depressed, so you still have people who bought eight or nine years ago at the peak of the market, paid top dollar, have high mortgages and the slightest bit of economic difficulty, and they just throw their hands up and say ‘it doesn’t make sense for me to continue to pay this mortgage,’” Landers said.

About Adam Bednar

Adam Bednar covers real estate and development for The Daily Record.