Charles County has second-highest foreclosure rate in state
Thursday, June 17, 2010
Charles County's foreclosure rate was the second-highest in the state in April, according to statistics compiled by a real estate analysis firm.
The county had one in every 297 housing units receiving at least one foreclosure filing, according to RealtyTrac.
The number includes homeowners in any stage of the process, from receiving a notice of default to having the bank seize the home. The rate is almost 1 1/2 times the state average, which in turn is higher than the national rate of one in 387.
Not far behind, at No. 4, was Calvert County, where one of every 311 homes is in foreclosure, according to RealtyTrac.
Saddled with the highest foreclosure rate in the state was Prince George's County, where one in every 234 homes is threatened or was seized by a bank. Prince George's also leads the state in total foreclosures, while no Southern Maryland county made the top five in that category.
Maryland as a whole had a 3 percent increase in rates over March, and a whopping 51 percent increase over April 2009, the report said. The increase bucks the national trend, where the rate dropped 9 percent in the month and 2 percent in the year.
Subprime mortgages marketed to the influx of new residents are partly responsible for the high foreclosure rate, Charles County Commissioner Reuben B. Collins II (D) said.
He praised state initiatives that he said slowed foreclosures, including a requirement that bank representatives meet with a property owner before foreclosing.
Anirban Basu, chairman and CEO of the Baltimore-based Sage Policy Group, an economic consulting firm, partially agreed with Collins.
A number of factors, principally real estate speculation gone awry and naïve first-time buyers, could be contributing to the foreclosure rate spike that "is a bit of a mystery to me," Basu said, because of Maryland's relatively low unemployment rate.
In Calvert, the foreclosure rate could be driven by investors buying waterfront property earlier in the decade. Intending to flip the homes, they were left holding the bag when housing prices collapsed, Basu speculated, adding that he saw the practice also in St. Mary's and southern Prince George's counties.
In Charles, a population boom of young workers buying "more houses than they could handle" is probably to blame, Basu said.
Linda Vassallo, Calvert County Director of Economic Development, echoed Basu's verdict when she wrote in an e-mail that, "foreclosures aren't broken down by principal residence so some foreclosures could be on second homes, rental properties or vacant land, which would make it seem that a county is much worse off than it really is."
On the impact of foreclosures on the local economy, Vassallo said: "Since we are not one of the leading jurisdictions for residential foreclosures, and we remain constant on economic growth and increases in the commercial assessable tax base, I would say that this has minimal impact."