May 29, 2009|By Lorraine Mirabella | Lorraine Mirabella,lorraine.mirabella@baltsun.com
The number of Maryland residents who face foreclosure or have missed payments on home loans rose to nearly 121,000 in the first three months of the year, with mortgage woes increasing the fastest among the less risky prime borrowers, the Mortgage Bankers Association said Thursday.
Loans that were late by at least a month, including some in the foreclosure process, accounted for 11.3 percent of the more than 1 million outstanding mortgages in Maryland at the end of March, up slightly from the fourth quarter of 2008 but an increase of 67 percent from a year earlier, the MBA said in its quarterly loan delinquency survey.
Earlier in the housing crisis, the riskier, "subprime" borrowers accounted for most foreclosures. But as unemployment has soared, prime borrowers, who typically have strong credit, are making up a growing number of borrowers who fall behind or lose their homes, both in Maryland and nationally, an MBA economist said.
In Maryland, more of the foreclosure proceedings started in the first quarter were for prime loans than for subprime. And more of the people who'd fallen behind by at least one payment, including those facing foreclosure, were prime borrowers. The number of prime borrowers behind on their payments, including those in foreclosure, rose 90 percent compared with a year earlier, while the number of subprime borrowers in that category rose 44 percent, the MBA survey said.
"We're still very much in the midst of a foreclosure crisis," said Anirban Basu, chief executive officer of Baltimore-based economic consulting firm Sage Policy Group Inc. "We remain in a period of extended job loss."
In the U.S., the combined percentage of loans in foreclosure and at least one payment past due hit a record high of 12 percent on a non-seasonally adjusted basis, the association reported. The delinquency rate for mortgages in the U.S. fell slightly from the fourth quarter to 8.2 percent, but the MBA said those rates typically decline in the first three months of the year. The percentage of loans facing foreclosure at the end of March rose to a record 3.85 percent from the previous quarter, the survey showed.
Nationally, the foreclosure rate on prime fixed-rate loans has doubled in the last year, and those conventional loans are making up the largest share of new foreclosures for the first time since lenders began increasing subprime lending,
"Delinquencies are very much tied to employment," said Jay Brinkmann, the MBA's chief economist. "When people have jobs and will be buying houses, we'll see [home] prices stabilize, but until prices increase in some areas we are still going to see a number of homes in foreclosure. If you lose your job, you can't sell your home for enough to pay off the mortgage."
Crystal Wright, a spokeswoman for auctioneers Hudson & Marshall of Texas Inc., which plans to offer 31 homes in the Baltimore area June 4, said the company is seeing growing numbers of owner-occupant bidders on foreclosed homes.
"These are either first-time home buyers or buyers looking to upgrade to a bigger home or different neighborhood," said Wright. The Baltimore auction at the Holiday Inn-BWI International Airport Loewes will include bank-owned properties ranging in price from $15,000 to $400,000 in Baltimore City as well as Baltimore, Harford, Anne Arundel and Carroll counties.
Baltimore Sun reporter Jamie Smith Hopkins contributed to this article.
