Twenty-seven foreclosures are listed today in The Frederick News-Post.
It’s not the highest number — one day this spring had 30 — but it reveals that problems continue to simmer in the housing market.
“There are still quite a few foreclosures out there,” said Terry Fox, president of the Frederick County Association of Realtors.
However, Fox said foreclosures, if a property makes it to that stage, take a long time.
“It doesn’t happen right away. It can take six months for the bank or lender to go through appraisal, inspection, title work, etc.,” she said.
Local market picking up
Both Fox and Stephen Mackintosh, of Mackintosh Inc. Realtors, said the local home sales market is picking up slightly, though many people are waiting for prices to drop.
With builders constructing fewer new homes, sales of existing homes should increase, Mackintosh said.
More than 2,000 homes are listed for sale in Frederick County, about twice the number of other real estate markets in the area.
Steve Meszaros, treasurer of the Maryland Association of Realtors, said some people, often driven by media reports of doom and gloom in the realty market, are holding off.
“They think that since there are more foreclosures, they will simply wait for one and get a house at a lot less price,” he said.
“They might see a house on the market 120 to 130 days and think the owner is going to foreclosure,” Meszaros said. “It is holding up the normal real estate market.”
Considering the current interest rates, inventory of homes and the buyer’s market, this is the best time to buy a house in the past 30 years, Meszaros said.
Return to lender
Mackintosh said anyone with problems, such as delinquency on a mortgage, should immediately talk with the lender.
He said most lenders will do what they can to curtail a foreclosure, including refinancing to allow people to keep their houses.
“Banks want to get their money, but they don’t want to do foreclosures if possible,” Meszaros said.
Meszaros said that in 99 percent of cases, the lender will work with the borrower.
“If the borrower can’t pay the higher rate on an (adjustable rate mortgage), there is a good chance the bank will refinance,” he said.
But it is not guaranteed.
Homeowners must show why they can’t meet the mortgage payments and negotiations could range over refinancing, finding a buyer for the house, paying the difference between the sale price and what is owed, or other alternatives.
As of May, there were 849 foreclosures listed in Frederick County from the last 12 months, according to RealtyTrac.
Bargain Network, another foreclosure-tracking firm, said it expects foreclosures to be up about 2 percent for the second quarter of this year, compared to a year ago.
The Mortgage Bankers Association said that as of May, only 1 percent of loans are in the foreclosure process. Three out of four of those are settled before they reach the complete foreclosure process, the MBA said.
U.S. economy will prevail
Last week, Federal Reserve Chairman Ben Bernanke said the overall U.S. economy would prevail through the housing slump and foreclosure epidemic.
Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, stated the same thing in June during an economic summit at Frederick Community College.
Lacker emphasized a need for consumer education on loans, a point echoed by Fox, the FCAR president.
Bernanke said subprime credit losses could reach $100 billion. The Fed is considering cracking down on subprime lenders, including some who don’t even require proof of a borrower’s income.
But Lacker warned against over-regulating lending that would keep qualifying homeowners from purchasing a home.
In Maryland, there are two types of foreclosures — judicial and nonjudicial.
In the first, the contract does not allow the lender to sell the property until first filing a complaint against the borrower. A court decides whether a loan default has occurred. If so, the court decides a reasonable time for the borrower to negotiate with the lender or go to foreclosure.
In a non-judicial foreclosure, the contract allows the lender to sell, but it must be filed with the court, and there are requirements on posting the sale and notifying the borrower.
At the state level, Gov. Martin O’Malley set up a task force last month called Maryland Homeownership Preservation.
The group, made up of representatives from lending, banking, affordable housing and other fields, will look at refinancing, mortgage insurance and counseling for consumers.
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