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Posted by: Prashant Gopal on June 13, 2008
If you’ve been reading HotProperty’s coverage of the foreclosure crisis, you’re not going to be surprised by RealtyTrac’s latest report, which shows that foreclosure filings jumped 7% in May compared to the previous month and rose 48% compared to May 2007.
The foreclosure filing rate in Nevada was the worst in the country as it has been for many months. California had the highest number of foreclosures. And the problems continue to worsen in Florida.
Digging lower down the list, I found something interesting. Maryland, which had the sixth worst foreclosure rate in April, had fallen back to No. 22 on the list in May. The May rate of foreclosure filings dropped by 61% in Maryland from a month earlier. Why such a big drop off? One possibility: a new law in Maryland that took effect in April gives distressed homeowners a little breathing room. Lenders must wait at least 90 days after a borrower defaults on a loan before initiating foreclosure proceedings. Lenders must also warn homeowners at least 45 days in advance that they are initiating foreclosure actions.
Other states are also taking action to give borrowers more time to work out problems. Lenders are swamped with filings and can’t necessarily give borrowers the attention they need.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.