Number of homes on the market in the Baltimore metro area for under $250,000 in May 2006: 3,600.
In May 2007: 5,400.
In May 2008: almost 7,400.
Baltimore metro area home sales fell 30 percent in May compared with a year ago, continuing the trend. Average prices were up modestly -- 1 percent, to about $316,000 -- but median prices were down about the same amount. (The median is the midpoint, which means half the homes are more expensive and half are less.)
Seems like the housing market has been playing the same song since last September.
Interested in seeing the figures or checking out county-by-county performance? Go to Metropolitan Regional Information Systems' stats page. (http://weblogs.baltimoresun.com/business/realestate/blog/)
Monday, June 16, 2008
Wednesday, June 11, 2008
Despite Interest Rate Cuts, Foreclosures Hit Record High
Even though lower interest rates have made many adjustable-rate mortgages more affordable, foreclosures continue to reach new heights as more than 1 million homeowners face losing their home, according to industry figures released yesterday.
That's because what began as a mortgage crisis focused largely on subprime borrowers has spread and is being fed by the slowing economy it helped create. Borrowers once considered the most creditworthy have been hamstrung by declining home prices, making it difficult to refinance their home to dodge a financial crunch.
About 2.47 percent of home mortgages were in foreclosure during the first quarter of the year, up from 1.28 percent during the comparable period last year and the highest point since the Mortgage Bankers Association began compiling figures in 1979. Another 6.35 percent of home mortgages were delinquent but not yet in foreclosure, up from 4.84 percent last year, the survey found. Taken together, that means that almost 9 percent of mortgages nationally were in trouble, even though sharp Federal Reserve interest rate cuts have cushioned payment increases for some homeowners.
More than 60 percent of the loans entering foreclosure are adjustable-rate mortgages, but the problem does not appear to be the "rate shocks" widely forecast about a year ago. Many of "the loans went bad before any of the resets took place, which is why talking about carving out solutions for just ARM reset problems is misplaced," said Guy Cecala, publisher of Inside Mortgage Finance.
A borrower with a typical-size subprime ARM could expect payments to increase about $70 a month if it reset now, compared with about $450 a month if it had reset in December, according to the American Securitization Forum, a financial industry group.
"So we're not going to see rate shocks causing defaults," said Christopher Mayer, real estate professor at Columbia Business School.
Also, while delinquency rates among subprime borrowers continue to rise, prime borrowers are a growing part of the problem, Mayer said. During the first quarter, the number of prime loans that began foreclosure increased faster than subprime loans, according to the Mortgage Bankers Association.
"The recent increases have been coming from the safer group of borrowers. They are the next shoe to come down," Mayer said.
And although the Fed's interest rate decreases have helped some homeowners with adjustable-rate mortgages, those with artificially low teaser or introductory rates are still experiencing significant increases, said Mark Goldman, a real estate finance lecturer at San Diego State University. "Most of the adjustable-rate loans are resetting to very modest rates, but it can still be a big shock," he said.
Even a slight increase in payments, compounded by rising food and fuel prices, can push homeowners to the financial edge, analysts said. "There is no question: The softening economy, gas prices, all that is just throwing more lighter fluid on an already inflamed situation," Cecala said.
For instance, a growing percentage of troubled borrowers who contact the Consumer Credit Counseling Service of Greater Atlanta have reduced income, having lost overtime pay or a second job, according to data collected by the group. Last year, 22 percent of homeowners listed reduced income as the reason they are in distress. So far this year, it is about 28 percent.
In April, clients spent an average of $335 a month on groceries, up from $291 during the comparable period last year. They spent $242 on gasoline this year, up from $181 in April 2007.
Many clients have adjustable-rate mortgages, but that is not necessarily what caused their problem, said Scott Scredon, a spokesman for the counseling service. "Their rate is going up, plus they lost their job. . . . Then you throw in the rising costs of fuel and food, and it takes away more and more of their disposable income," he said.
The intensity of the foreclosure problem, which is expected to worsen, varies across the country. In the District, 2.39 percent of loans included in the survey were seriously delinquent or in foreclosure in the first quarter, according to the Mortgage Bankers Association. That is up from 1.09 percent during the same period last year. In Maryland, 3.02 percent of mortgages were in trouble, compared with 1.21 percent. And in Virginia, the rate rose to 2.52 percent from 1.99 percent.
The bulk of the problem remains in California and Florida, which reported, respectively, that 9.24 percent and 8.25 percent of subprime ARMs were entering foreclosure, said Jay Brinkmann, vice president for research and economics at the Mortgage Bankers Association. "Clearly things in California and Florida are going to get worse before they get better," he said. (By Renae Merle, Washington Post Staff Writer. Friday, June 6, 2008)
That's because what began as a mortgage crisis focused largely on subprime borrowers has spread and is being fed by the slowing economy it helped create. Borrowers once considered the most creditworthy have been hamstrung by declining home prices, making it difficult to refinance their home to dodge a financial crunch.
About 2.47 percent of home mortgages were in foreclosure during the first quarter of the year, up from 1.28 percent during the comparable period last year and the highest point since the Mortgage Bankers Association began compiling figures in 1979. Another 6.35 percent of home mortgages were delinquent but not yet in foreclosure, up from 4.84 percent last year, the survey found. Taken together, that means that almost 9 percent of mortgages nationally were in trouble, even though sharp Federal Reserve interest rate cuts have cushioned payment increases for some homeowners.
More than 60 percent of the loans entering foreclosure are adjustable-rate mortgages, but the problem does not appear to be the "rate shocks" widely forecast about a year ago. Many of "the loans went bad before any of the resets took place, which is why talking about carving out solutions for just ARM reset problems is misplaced," said Guy Cecala, publisher of Inside Mortgage Finance.
A borrower with a typical-size subprime ARM could expect payments to increase about $70 a month if it reset now, compared with about $450 a month if it had reset in December, according to the American Securitization Forum, a financial industry group.
"So we're not going to see rate shocks causing defaults," said Christopher Mayer, real estate professor at Columbia Business School.
Also, while delinquency rates among subprime borrowers continue to rise, prime borrowers are a growing part of the problem, Mayer said. During the first quarter, the number of prime loans that began foreclosure increased faster than subprime loans, according to the Mortgage Bankers Association.
"The recent increases have been coming from the safer group of borrowers. They are the next shoe to come down," Mayer said.
And although the Fed's interest rate decreases have helped some homeowners with adjustable-rate mortgages, those with artificially low teaser or introductory rates are still experiencing significant increases, said Mark Goldman, a real estate finance lecturer at San Diego State University. "Most of the adjustable-rate loans are resetting to very modest rates, but it can still be a big shock," he said.
Even a slight increase in payments, compounded by rising food and fuel prices, can push homeowners to the financial edge, analysts said. "There is no question: The softening economy, gas prices, all that is just throwing more lighter fluid on an already inflamed situation," Cecala said.
For instance, a growing percentage of troubled borrowers who contact the Consumer Credit Counseling Service of Greater Atlanta have reduced income, having lost overtime pay or a second job, according to data collected by the group. Last year, 22 percent of homeowners listed reduced income as the reason they are in distress. So far this year, it is about 28 percent.
In April, clients spent an average of $335 a month on groceries, up from $291 during the comparable period last year. They spent $242 on gasoline this year, up from $181 in April 2007.
Many clients have adjustable-rate mortgages, but that is not necessarily what caused their problem, said Scott Scredon, a spokesman for the counseling service. "Their rate is going up, plus they lost their job. . . . Then you throw in the rising costs of fuel and food, and it takes away more and more of their disposable income," he said.
The intensity of the foreclosure problem, which is expected to worsen, varies across the country. In the District, 2.39 percent of loans included in the survey were seriously delinquent or in foreclosure in the first quarter, according to the Mortgage Bankers Association. That is up from 1.09 percent during the same period last year. In Maryland, 3.02 percent of mortgages were in trouble, compared with 1.21 percent. And in Virginia, the rate rose to 2.52 percent from 1.99 percent.
The bulk of the problem remains in California and Florida, which reported, respectively, that 9.24 percent and 8.25 percent of subprime ARMs were entering foreclosure, said Jay Brinkmann, vice president for research and economics at the Mortgage Bankers Association. "Clearly things in California and Florida are going to get worse before they get better," he said. (By Renae Merle, Washington Post Staff Writer. Friday, June 6, 2008)
Thursday, June 5, 2008
A Growing Problem: Overgrown Lawns At Foreclosed Homes
The number of foreclosures has skyrocketed around Maryland, jumping a whopping 40 percent between April and May. While there isn't always a foreclosure sign in front of the home, there's a very good chance the grass hasn't been mowed.
The foreclosure crisis is affecting more than just people; it's affecting lawns.
Frederick city officials tell NBC25 they simply can’t keep up. They’re getting an explosion of calls from residents complaining about out-of-control lawns in their neighborhoods.
"The foreclosing market has tripled our complaint basis," said Michael Blank, who works in code enforcement for the city.
Grass and weeds above 10 inches tall are violating the City of Frederick's rules. That's when officials step in to do something about it.
"Anything over 10 inches get a notice for them to remove and cut the grass within five days," Blank said.
But since the foreclosed homes are vacant, no one's there to clean up. That's when the city hires people to mow and manicure the lawn for a pretty penny.
Blank says the average bill runs around $200 per cut.
It could be even higher, depending on how much there is to clean up.
The city doesn't just absorb the costs. They forward the bills to the last known owner, or to the mortgage company.
It's not just a city issue; Frederick County officials are getting a lot of complaints, too.
There's not much the county can do about it though because they don't have a lawn ordinance.
"There's really no advice that we can give to them that will in fact, provide a remedy for them," said Larry Smith, a Frederick County zoning administrator.
Frederick city officials are considering assigning someone full-time to do grass, weed and trash inspections on foreclosed homes. (www.your4state.com)
The foreclosure crisis is affecting more than just people; it's affecting lawns.
Frederick city officials tell NBC25 they simply can’t keep up. They’re getting an explosion of calls from residents complaining about out-of-control lawns in their neighborhoods.
"The foreclosing market has tripled our complaint basis," said Michael Blank, who works in code enforcement for the city.
Grass and weeds above 10 inches tall are violating the City of Frederick's rules. That's when officials step in to do something about it.
"Anything over 10 inches get a notice for them to remove and cut the grass within five days," Blank said.
But since the foreclosed homes are vacant, no one's there to clean up. That's when the city hires people to mow and manicure the lawn for a pretty penny.
Blank says the average bill runs around $200 per cut.
It could be even higher, depending on how much there is to clean up.
The city doesn't just absorb the costs. They forward the bills to the last known owner, or to the mortgage company.
It's not just a city issue; Frederick County officials are getting a lot of complaints, too.
There's not much the county can do about it though because they don't have a lawn ordinance.
"There's really no advice that we can give to them that will in fact, provide a remedy for them," said Larry Smith, a Frederick County zoning administrator.
Frederick city officials are considering assigning someone full-time to do grass, weed and trash inspections on foreclosed homes. (www.your4state.com)
Tuesday, May 6, 2008
MD Comptroller: foreclosures will hit local budgets hard
The effect of the foreclosure crisis will hit hardest at local budgets, according to the state's chief tax official.
And recent emergency legislation passed by the Maryland General Assembly, will have little effect on Maryland's tide of foreclosures. Now, the state's hands are tied, said Comptroller Peter Franchot.
Franchot said he applauds efforts by Gov. Martin O'Malley and the legislature, but that it is too little too late.
"It's not their fault," Franchot said during a recent visit to The Frederick News-Post. "The responsibility for the foreclosure crisis rests with Washington. The last several years of Washington have been like the Wild West. Anything goes. And that lack of regulation has a price that we're going to pay for years to come."
The bill O'Malley signed will lengthen the foreclosure process from 15 to 150 days, and require a lender to wait 90 days before filing a foreclosure action. It also strengthens prohibitions on mortgage fraud
According to the governor's office, in the fourth quarter of 2007, Prince George's, Montgomery, Washington and Worcester counties saw foreclosures double from previous quarter.
In other counties, such as Kent, Garrett and Somerset, numbers almost tripled.
Maryland saw 9,722 foreclosures, compared to 7,001 in the previous quarter, an increase of 2,721 foreclosure events statewide.
Local revenue will be particularly hit in 2009 and 2010, Franchot said.
"We're in a real mess," he said.
Copyright 2008 The Frederick News-Post. All rights reserved.
The effect of the foreclosure crisis will hit hardest at local budgets, according to the state's chief tax official.
And recent emergency legislation passed by the Maryland General Assembly, will have little effect on Maryland's tide of foreclosures. Now, the state's hands are tied, said Comptroller Peter Franchot.
Franchot said he applauds efforts by Gov. Martin O'Malley and the legislature, but that it is too little too late.
"It's not their fault," Franchot said during a recent visit to The Frederick News-Post. "The responsibility for the foreclosure crisis rests with Washington. The last several years of Washington have been like the Wild West. Anything goes. And that lack of regulation has a price that we're going to pay for years to come."
The bill O'Malley signed will lengthen the foreclosure process from 15 to 150 days, and require a lender to wait 90 days before filing a foreclosure action. It also strengthens prohibitions on mortgage fraud
According to the governor's office, in the fourth quarter of 2007, Prince George's, Montgomery, Washington and Worcester counties saw foreclosures double from previous quarter.
In other counties, such as Kent, Garrett and Somerset, numbers almost tripled.
Maryland saw 9,722 foreclosures, compared to 7,001 in the previous quarter, an increase of 2,721 foreclosure events statewide.
Local revenue will be particularly hit in 2009 and 2010, Franchot said.
"We're in a real mess," he said. (The Frederick News-Post. All rights reserved)
And recent emergency legislation passed by the Maryland General Assembly, will have little effect on Maryland's tide of foreclosures. Now, the state's hands are tied, said Comptroller Peter Franchot.
Franchot said he applauds efforts by Gov. Martin O'Malley and the legislature, but that it is too little too late.
"It's not their fault," Franchot said during a recent visit to The Frederick News-Post. "The responsibility for the foreclosure crisis rests with Washington. The last several years of Washington have been like the Wild West. Anything goes. And that lack of regulation has a price that we're going to pay for years to come."
The bill O'Malley signed will lengthen the foreclosure process from 15 to 150 days, and require a lender to wait 90 days before filing a foreclosure action. It also strengthens prohibitions on mortgage fraud
According to the governor's office, in the fourth quarter of 2007, Prince George's, Montgomery, Washington and Worcester counties saw foreclosures double from previous quarter.
In other counties, such as Kent, Garrett and Somerset, numbers almost tripled.
Maryland saw 9,722 foreclosures, compared to 7,001 in the previous quarter, an increase of 2,721 foreclosure events statewide.
Local revenue will be particularly hit in 2009 and 2010, Franchot said.
"We're in a real mess," he said.
Copyright 2008 The Frederick News-Post. All rights reserved.
The effect of the foreclosure crisis will hit hardest at local budgets, according to the state's chief tax official.
And recent emergency legislation passed by the Maryland General Assembly, will have little effect on Maryland's tide of foreclosures. Now, the state's hands are tied, said Comptroller Peter Franchot.
Franchot said he applauds efforts by Gov. Martin O'Malley and the legislature, but that it is too little too late.
"It's not their fault," Franchot said during a recent visit to The Frederick News-Post. "The responsibility for the foreclosure crisis rests with Washington. The last several years of Washington have been like the Wild West. Anything goes. And that lack of regulation has a price that we're going to pay for years to come."
The bill O'Malley signed will lengthen the foreclosure process from 15 to 150 days, and require a lender to wait 90 days before filing a foreclosure action. It also strengthens prohibitions on mortgage fraud
According to the governor's office, in the fourth quarter of 2007, Prince George's, Montgomery, Washington and Worcester counties saw foreclosures double from previous quarter.
In other counties, such as Kent, Garrett and Somerset, numbers almost tripled.
Maryland saw 9,722 foreclosures, compared to 7,001 in the previous quarter, an increase of 2,721 foreclosure events statewide.
Local revenue will be particularly hit in 2009 and 2010, Franchot said.
"We're in a real mess," he said. (The Frederick News-Post. All rights reserved)
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