The number of Maryland homeowners in the grip of a foreclosure crisis is rising by the day. About 121,000 residents have already missed out on their mortgage payments. Even the prime borrowers seem to be faltering on mortgage payments. This was revealed by the Mortgage Bankers Association.
The percentage of people who were at least one month behind mortgage payment was 11.3 percent. The figure is slightly higher than what it was in the last half of 2008. But this is definitely up by 67 per cent from the previous year.
Earlier, the “subprime” borrowers were considered risky with more foreclosure filings in their name. But with soaring unemployment, prime borrowers, too, are falling behind in their mortgage payment. In Maryland, a majority of the foreclosure filings in the first half belonged to the prime bracket. It has been noticed that the prime borrowers have fallen behind by one payment at least. In fact, the percentage of prime borrowers who has skipped on payments jumped by 90 per cent as compared to the previous year. The subprime borrowers in that group rose by 44 per cent in the same period. Anirban Basu, CEO, Sage Policy Group Inc, a Baltimore-based economic consulting firm said the housing industry is in the grip of an acute crisis. Job losses will continue for sometime now, he observed.
The failure rate for mortgage payment has fallen slightly but experts observe that it happens in the first half. Nationwide, foreclosure filings on prime loans, has almost doubled in 2008 and these loans given to prime borrowers now constitute a major chunk of foreclosure filings. Jay Brinkmann, the MBA’s chief economist, says the falter rates are inexorably tied to employment. When the economy is booming and people are employed, they will be buying homes. The housing industry, as a consequence, will be booming but when there is unemployment all around, one just cannot expect home prices to stabilize. Then individuals have no other alternative but to sell homes to pay off the mortgage.
Crystal Wright, a spokeswoman for auctioneers Hudson & Marshall said that auctions are normally being driven by owner-occupied homes. The company recently plans to offer bids on 31 homes in Baltimore. The properties that will come up for auction will include homes in the range of $15,000 to $400,000 in Baltimore City and Baltimore. Wright says that a majority of them constitute first-time home buyers.
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