Fewer in Md. paying on time

Delinquent payments on mortgages increase

`Pretty much what we expected'

2nd-quarter rate stays below last year's level

September 12, 2004|By Kathleen Cullinan | Kathleen Cullinan,SUN STAFF

The number of Maryland homeowners who fell behind on their mortgage payments increased during the second quarter, but industry experts think that will improve in coming months if job growth is strong.

Of Maryland's 961,371 mortgage holders, 4.24 percent were at least 30 days late on their payments from April to June, according to a national survey released by the Mortgage Bankers Association last week.

That was 0.35 percentage points higher than the first-quarter rate of 3.89 percent, which was the lowest rate in more than a decade.

Although the delinquency rate jumped, it remains below last year's level, the bankers group said. From April to June last year, 5.02 percent of homeowners were 30 days or more late in their mortgage payments.

The delinquency rate does not include accounts being foreclosed.

The quarterly increase is "pretty much what we expected," said Douglas Duncan, chief economist for the association, adding that delinquencies are seasonal.

Low mortgage interest rates have helped the industry perform well during the past three years. And, because rates have remained below 6 percent for much of this year, experts predict that the housing market will remain strong.

"We view the mortgage market as quite healthy," Duncan said. Others worry that low mortgage rates have helped push home prices up too fast and that many homeowners can't afford the rising costs.

Wages are not keeping up with the cost of housing, said Becky Sherblom, executive director of the Baltimore-based nonprofit Maryland Center for Community Development.

"Any sort of financial problem, whether it be a blown transmission" or an unexpected health care cost, "can make it nearly impossible to stay current on your mortgage," Sherblom said.

Nationally, the seasonally adjusted rate of delinquencies rose in the second quarter to 4.43 percent from 4.33 in the first three months of the year.

When comparing data for Maryland and the national figures, which aren't seasonally adjusted, the increases from the first quarter to the second quarter are similar.

The state's percentage of loans in foreclosure continued a downward trend during the second quarter, falling to 0.96 percent from 1.13 percent from January to March.

Nationally, the foreclosure rate fell to 1.16 percent in the second quarter from 1.27 percent in the first.

Sherblom said those figures are no reason to celebrate, either. She said many homeowners remain strapped by rising costs and are often "one paycheck away from foreclosure."

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