The number of Maryland borrowers in danger of losing their homes is increasing at a dizzying pace.
Lenders were trying to foreclose on more than 13,000 homeowners at the end of last year, up about 150 percent from a year earlier, the Mortgage Bankers Association said yesterday. That's the biggest 12-month increase since the trade group began tracking the state numbers in 1979.
The percentage of loans in the foreclosure process remains higher nationwide, fueled by states harder hit by the housing slump and other economic troubles. The U.S. figure hit a record high, in fact, which has not happened in Maryland.
But the problem is worsening at a faster rate here.
"I've never seen anything like this," said Anne Balcer Norton, director of foreclosure prevention at St. Ambrose Housing Aid Center in Baltimore. "It's very upsetting."
The number of Maryland homeowners who are late on their payments but not yet facing foreclosure also rose. And that delinquency rate does not compare as well as it once did nationally. Thirty-one states had higher rates at the end of 2006, but now that group has shrunk to 23. The mortgage bankers attribute Maryland's deteriorating situation -- which comes despite its solid economy -- to an above-average run-up in prices during the housing boom.
"Anyplace where we have seen over the last five years a big increase in home prices, if I take that map and compare that now to the delinquency or the foreclosure increase map, they almost line up state for state," said Jay Brinkmann, the group's vice president of research and economics.
California and Florida, which saw bigger price jumps than Maryland, together accounted for 30 percent of loans entering the foreclosure process during the last three months of 2007. As values drop in those states, homeowners have "an incentive to walk away" from their loans -- especially adjustable-rate mortgages resetting to higher payments, said Doug Duncan, chief economist for the mortgage bankers.
In Maryland, as well as the nation, delinquencies and foreclosures are worst among higher-cost "subprime" loans. A sharp uptick in subprime lending during the housing boom not only increased the number of people in trouble, but is making it harder to help them, Norton said.
