The number of Maryland borrowers who face foreclosure or have missed mortgage payments topped 100,000 for the first time at the end of last year - a record 11.1 percent of loans in the state, the Mortgage Bankers Association said yesterday.
Rising joblessness is adding to a worsening housing crisis that has sent foreclosures and delinquencies to record levels, economists said yesterday. Problems for borrowers with subprime loans are now spreading into more conventional loans. Nationally, 12 percent of borrowers were behind on their mortgage payments at the end of December.
"Employment is the issue," Jay Brinkmann, MBA's chief economist, said during a conference call. "It's not an issue with changes in payment structure or payment resets. As jobs go away, you first see this show up in" subprime, fixed-rate lending. Then it works its way up to the less-risky prime loans.
In Maryland, the share of borrowers who missed payments rose to a high of 8.5 percent during the fourth quarter, the bankers group reported in its delinquency survey, which it has been conducting for 30 years.
About 91,160 home loans, out of just over 1 million mortgages in the state, were delinquent by at least one month but were not in the process of foreclosure.
The number of loans in the foreclosure process spiked 115 percent in the state, compared with the fourth quarter of 2007, the survey showed. Those loans - more than 28,000 - represented more than 2.6 percent of loans in the state and set a record for percentage of loans in danger of foreclosure.
"We had a housing market bubble that blew up," said John McClain, a senior fellow at the Center for Regional Analysis at George Mason University. "Then the overall economy started down. You have people who knew they were in a potentially 'upside-down' situation [owing more than their home is worth]. Some have had salaries frozen or been furloughed or laid off."
One in five U.S. mortgage borrowers owes more than their house is worth as of Dec. 31, First American CoreLogic said in a report released this week. In the Baltimore region, 12 percent of borrowers were "under water" as of December, the report said.
Maryland's delinquency rate was higher than the nation's overall 7.9 percent, which was adjusted for seasonal variations. (The state numbers were not adjusted.)
Still, Maryland has been cushioned somewhat from problems in states such as California, Nevada, Arizona and Florida, which had the biggest run-up in housing prices and now have the highest delinquency numbers, the bankers group said.
