Early bird tickets for Baltimore’s BEST party on sale now!

Md. foreclosures down in Q3, delinquencies up

The rate of new foreclosure filings in Maryland fell sharply during the third quarter after a significant spring bounce following the national mortgage settlement, according to data released Thursday.

New foreclosures were started on 1.17 percent of home loans in Maryland from July through September, down from 1.95 percent in the second quarter, the Mortgage Bankers Association said in a statement.

Maryland had the highest foreclosure start rate in the nation during the second quarter; it was sixth during the third quarter. The nation as a whole saw its lowest rate of foreclosure starts since 2007, the statement said.

The spring increase was caused in part by the settlement of a national lawsuit that alleged mortgage servicers had carelessly and illegally prepared foreclosure paperwork. Mortgage servicers had been holding back on beginning foreclosures until the lawsuit — partially about so-called robo-signing — was concluded.

The share of mortgaged homes at some point in the foreclosure process — the foreclosure inventory — in Maryland was flat from the second quarter. It remained just above 4.9 percent at the end of September, about the same as the end of July. The U.S. foreclosure inventory was 4.1 percent.

Maryland ranked 12th in the nation in terms of mortgages that were at least one payment past due, the association said. About 8.6 percent of residential mortgage loans were delinquent at the end of September, up from 8.4 percent at the end of July.

The rise in delinquencies may be holding down the foreclosure start rate, the association said. Several states, including Maryland, have processes that delay initiating foreclosure — the recipe for a backlog of delinquencies and fewer new foreclosures.

“The foreclosure rates in Maryland … continue to be impacted by state efforts to slow the foreclosure process and by servicers who have to adjust their internal foreclosure processes based on state requirements,” said Mike Fratantoni, the association’s vice president of research and economics. Maryland and similarly situated states, as a result, “often fluctuate between large increases in foreclosure starts accompanied by large decreases in 90-day delinquencies in a single quarter, or large increases in 90 day delinquencies accompanied by large decreases in new foreclosures started.”

The U.S. delinquency rate at the end of Q3 was 7.6 percent. Nationally, the percent of mortgages that were seriously delinquent — 90 days or more overdue — was at its lowest level since 2008, Fratantoni said.

Also on Thursday, major mortgage lender Freddie Mac announced that fixed mortgage rates were at record lows. The average rate on a 30-year fixed-rate mortgage was 3.34 percent for the week that ended Thursday, according to the firm’s Primary Mortgage Market Survey.

The prior low was the week ending Thursday, October 4. That week, the average rate for a 30-year fixed-rate mortgage was 3.36 percent.

Have a real estate news tip or experience to share? Email me at steve.kilar@baltsun.com.

Copyright © 2019, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad