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Foreclosures Down in Maryland but Homeowners Still Not Off the Hook

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By : Leticia Carvalho    99 or more times read
Statistics are showing that Maryland foreclosures dropped by almost 16 percent during the third quarter of 2008 from figures registered during the previous quarter. Quarter 2 of 2008 registered 9,453 foreclosures, which dropped to 7,974 during Quarter 3 of 2008.

According to state officials, the drop was a result of foreclosure prevention programs sponsored by the state including a new law requiring a longer grace period before homes are converted into repossessed houses.

These figures also ranked Maryland to the 20th state with most foreclosures during the third quarter, a remarkable improvement from 12th at the start of the year. Prince George’s County raked in the highest percentage with 35 percent followed by Montgomery and Baltimore at 14 Percent and 11 percent respectively.

During the height of the housing bubble a few years ago, several borrowers were able to take on high-risk mortgages with adjustable interest rates. These homeowners were relying on the continued increase of home prices, which would allow them to refinance at lower interest rates or sell their homes and make big profits.

A few years later, the bubble burst and interest rates jacked up and home values dropped tremendously leaving homeowners underwater. These homeowners eventually defaulted on their mortgages, which led to foreclosures.

State official in Maryland are still not confident with the current drop in figures and believes that the crisis in foreclosures would continue boiling. They are basing this prediction on the still weak economy and the possible resulting job losses that homeowners would incur.

The unemployment rate is already a high 5 percent and experts are expecting a higher rate by 2009. This situation would also be aggravated when interest rates on subprime mortgages begin to reset starting August next year. State officials are expecting bigger fallouts on foreclosures.

The state has stepped up its campaign to help troubled homeowners through several assistance programs including refinancing from subprime loans through deferred, no-interest loans for delinquent homeowners. The state is also expected to receive $46 million from the federal Neighborhood Stabilization Program.
Leticia Carvalho has been educated in the finer points of the foreclosure market over 5 years.

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