Published: November 27, 2007 11:59 am      

Impact being felt from local foreclosure rates

CUMBERLAND - The numbers of foreclosures are reaching those of divorce rates.

At Allegany County Circuit Court, a civil clerk who is charged with various duties spends nearly 50 percent of her time on them.

While the area hasn't been hit as hard as many others, the impact still can be felt.

A court spokesman said he's seen the number of foreclosures increase over the last five years to the point where attorneys from the metropolitan areas are paying couriers to drive here with paperwork rather than risk sending it through the mail.

"It's catching up with divorces," he said of the foreclosure rate.

Those foreclosures may be catching people's eyes more partly because public notices are required in the newspaper, with the first listing the times and places of sales; the second is to record the sale.

As the new president of the Historic Highlands Association of REALTORS, Melanie Pratt Dimaio, a real estate agent for 14 years, is well aware of the issue but finds it to be much better here compared to other areas.

"We are very fortunate in our area to only be experiencing a slight increase in foreclosures, mainly in the low- to mid-price ranges," she said in a prepared statement. "Our local foreclosure rate is not nearly as high as in the rest of the state of Maryland.

"Local lenders are to be given much of this credit for their conservative lending and appraisal procedures versus Internet lenders who give consumers enough rope to hang themselves with by using over-inflated appraisals from out-of-town appraisers and crazy loan programs," she continued.

A report issued in October by the Maryland Department of Housing and Community Development, said the "growth in mortgage loan delinquency and foreclosures" actually began in the second quarter of 2005 when the housing boom slowed not only in Maryland, but also across the country.

With the combination of increased mortgage rates and decreased home sales, the higher rate of foreclosures was the result.

Subprime mortgages, which have become more popular over the last six years, haven't helped. Adjustable rates and balloon payments are just some of the downfalls of such loans.

A National Delinquency Survey by the Mortgage Bankers Association found the number of delinquencies in the state reached an all-time high in the second quarter of 2007, which runs from April through June. At 43,980, that's an increase of 19.8 percent from the first quarter of the year and 30.8 percent more than 2006.

Delinquent subprime loans hit a high at 18,542 in the second quarter of 2007, a 28.7 percent increase from the first quarter of 2007 and 66.2 percent above last year. Such loans account for 42.2 percent of all delinquent loans in the state.

Baltimore City along with Prince George's, Montgomery, Baltimore and Anne Arundel counties have the majority of all foreclosures in Maryland at 75.2 percent.

Locally, Garrett County ranks 23rd in number of foreclosures, with only two in the second quarter of 2007. It is higher only to Somerset County, which had zero. Garrett also had zero in both the first quarter of this year and in 2006.

Allegany County, however, has a few more, at 23 foreclosures for the second quarter. That puts it at 17th highest in the state, which is a 188 percent change from the second quarter of 2006.

The story is much worse in nearby Washington County, which ranks third in the state for the number of foreclosures. With 125 in the second quarter, that's a 12,400 percent change from the first part of this year and 6,150 percent change from the second quarter of '06.

Frederick fares a bit better.

Ranked nearly in the middle at 10th, it had 123 foreclosures in the second quarter. That's an 86 percent change from the first quarter and 669 percent change from the 2006 numbers.

Earlier this month at the Predatory Sub-Prime Lending Conference held at Allegany College of Maryland, William Ariano Jr., deputy director for the Community Development Authority, said Maryland ranks eighth in the country with the total number of subprime loans per capita but ranks 40th in the percentages that are in serious delinquency.

Contact Maria Smith at msmith@times-news.com.