Foreclosure activity in Prince George’s County is up 45.1 percent from this point last year, according to a report on foreclosures released by the Maryland Department of Housing and Community Development, with the county continuing to lead Maryland in the number of homes in some state of foreclosure proceedings.
“It continues to be a challenge for us,” said Thomas Himler, the county’s deputy chief administrative officer for budget, finance and administration. “It's hard to estimate where the bottom is.”
Prince George’s had roughly one-third of all foreclosure events in Maryland in the third quarter of 2012 with about 1,300, of which 581 were caused by new notices of default being issued, according to the report released Oct. 19.
Overall, the county’s foreclosure activity was up by about 5.4 percent and increased 45.1 percent in the county versus 2011, according to the report.
In Maryland overall, foreclosure events declined by about 4.5 percent from the second quarter to about 4,153 in the third quarter. However, that statewide number was still up about 28 percent from last year, a statistic blamed on the low level of foreclosure activity in the second half of 2011.
Foreclosure activity had been weak during 2011 as lenders had been cautious about moving forward with foreclosures, said Ethan Cohen-Cole, a former assistant professor with the University of Maryland, College Park, and a former financial economist at the Federal Reserve Bank of Boston who is now a managing director with the New York-based consulting and management firm, Alvarez & Marsal.
The hesistancy came as some of the nation’s biggest lenders were involved in a battle with federal regulators who alleged they abused the foreclosure process. That battle ended with the nation’s biggest banks settling with the government for $26 billion in February. With the settlement in place, lenders are ready to process a large backlog of contracts, Cohen-Cole said.
“After the settlement, they were more confident they could go forward,” he said. “With the upturn in the housing market, it makes it more a of a viable option to close on the home and resell.”
Foreclosures will most likely continue to remain high for the next two years as banks deal with the backlog and if the housing market strengthens to allow the homes to be resold, Cohen-Cole said. However a stronger housing market could also benefit those facing foreclosure, he said.
“If the value of houses goes up, those in mortgages they no longer are able to afford may be able to sell them and avoid a foreclosure,” he said.
Across the country, foreclosures had been on the decline during the past quarter, according to the DHCD. Foreclosure events, which include notices of a tenant going into default and notices of sale of a foreclosed property, declined by 4.7 percent nationwide and were down by about 12.9 percent compared to the same period in 2011, according to DHCD.
The county government has been trying to tackle the county’s high foreclosure numbers through a variety of efforts ranging from efforts to purchase and resell foreclosed properties to attempts to assist homeowners struggling to make their monthly payments with counseling, Himler said.
Ruth Wright, president of housing rights advocacy group Prince George’s Real Estate Professionals, said it’s impossible to predict when the county real estate market will rebound.
“Economists can’t even tell you,” she said. “It’s one big mess.“
Dealing with the county’s housing woes will require more cooperation and work by government agencies, housing advocates and lending intuitions, Himler said.
“In order to be successful, it’s going to take everybody working together,” he said.