One state is succeeding in slowing foreclosures... at least for now

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.

Reader Comments

snoz

June 14, 2008 05:00 PM

The Nevada foreclosure rate is misleading in that it gives the impression that people all over Nevada are losing their homes. In fact, the supermajority of the foreclosures are in the surrounding area of Las Vegas as well as Laughlin. It is into these area that those evil Californians have come to ply their oldest profession: real estate speculation. Poor Las Vegas. So close to California and so far away from God. The reason for the incredulous number of foreclosure in Las Vegas is the Californian scamers. Droves of Californian real estate scamers trek to Las Vegas recreating an artificial unsustainable real estate feeding frenzy just as they had done in Southern California. Spreading the California real estate scam to Las Vegas, the speculators sought to build their house of wealth on shifting, cheap desert sand. But this is Las Vegas, the land of Sodom and Gommorrah where God has warned all, especially its California sinners who dwell within its citywall, to restrain their avarice and thirst for the pleasure of the greenback. They heed not. They repent not. Some turned back seeking double-dipping while hot-and-heavy newbies were seduced into the real estate orgy. And as it is written, it came to pass that judgment day arrived, and Truth of ARM Lending casted away the evil California real estate scamers as well as all those who gave aid,shelter and comfort to them: the Big Wall Street banks, real estate mortgage brokers and dealers, and home appraisers. Surely, the California real estate speculators will have reapt its just reward. For it is written that the wages of their sinful speculation is foreclosure because for all of the days to come they shall now slowly cough-up their retirement fund as retribution for their speculation greed. “Save me! Save me!” they now plead eloquently to false prophets for relief and salvation but their hands are dirty;their words are but filthy rags; their mortgage papers are toxic IOUs. There is but one soothing consolation for these real estate scamer on death row: There is a covenant that said what shall be done unto Nevada Las Vegas real estate shall be in turn done unto Southern California real estate. Verily, I say unto you, the days of judgment and atonement are set loose upon the land of Cain. So it is written and shall come to pass.

Anita Nasuto

June 17, 2008 05:50 PM

This is one of the most obnoxious commentaries on the subject I have read to date. Shame on the writer and hope he/she is praying that they too never experience the distress that has fallen on the "scammers" they talk about. We know better that everyone who is caught up in this mess is not a SCAMMER.

Just Visiting

June 19, 2008 12:42 AM

Just wait until the Marylanders try to borrow money in the future. Since the powers that be decided to sweep away lenders' property rights, lenders will be loathe to extend credit in the absence of a high likelihood it will be paid back. When lending happens, it will be in lesser amounts. Some lenders may leave the state altogether, or cut back drastically by confining themselves to cherry-picking select borrowers.

Vegas

June 23, 2008 01:41 PM

the one thing he is correct on is that the Speculators combined with greed caused the downfall of real estate in Vegas, of which everyone (including regular homeowners) is paying the price because more than 50% of every person that bought a home here in the last two years is underwater.

I came here in 2004 trying to find a home for my family since I had a new job here. What I found was houses that were reselling for $50,000 more every other week or faster and appraisers who supported any price handed to them.

Had the appraisers ignored the speculator flipping and used true sales from 5-6 months earlier the doubling and tripling of home prices would not have happened.

New home builders would not even talk to you back then. They sat at their sales desks reading papers, ignoring you and telling you the only way to get on their 2 YEAR waiting list was to be preapproved by their lender (which is illegal) and then agree to buy an unknown house on an unknown lot for an unspecified price that was going up thousands per minute.

By the time you got to a house listed on the MLS it had been bid up 3 to 4 times by speculators.

We finally got our home and had to pay $100,000 more than it sold for not 5 months earlier from the builder. No one had even lived in it and it already had 2 owners.

We got a 30 year fixed so we are riding out this ugly wave. I feel bad for our next door neighbor who has a house 500 sq ft less than ours on a smaller lot and paid the same amount we paid since it was 2006 by then.

Sure the specualtors are getting foreclosed on..that is the result of their greed.

However, all the regular everyday homeowners are paying the true price with 3 years worth of homes that will never be worth what they paid for them....what will be the end result of that one?

Thank you for your interest. This blog is no longer active.

 

About

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.

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