Foreclosures skyrocket; state takes action

Since January, Maryland rate has tripled from 2006

The rise in foreclosures has been partly blamed for a drain on the national economy and Wall Street by some experts. In Maryland, the state’s foreclosure situation ‘‘has been steadily moving in the wrong direction,” said Thomas E. Perez, secretary of Maryland’s Department of Labor, Licensing and Regulation, on Monday.

One factor behind Maryland’s skyrocketing rate has been ‘‘exotic mortgages coming home to roost,” Perez said. Rescue swindles in which con artists cheat people desperate about losing their homes to foreclosure have also risen significantly in the state, he said.

As part of state efforts to handle the rise in foreclosures, Perez’s agency has started investigations into 95 mortgage cases this year, and is in the process of hiring four more investigators to step up efforts to combat mortgage fraud, Perez said.

In July 2006, Maryland ranked 41st in the nation in foreclosure filings per capita with 328, or one for every 6,532 households, according to Irvine, Calif., data company RealtyTrac. Last month, the state moved up to 16th place with 2,214 filings, or one per 1,027 households.

Over the first seven months of the year, foreclosures in Maryland jumped to more than 9,000, compared with about 2,500 during the same period in 2006. Meanwhile, foreclosures across the nation grew from almost 700,000 to 1.1 million during the same period. Foreclosures increased much more slowly from 2005 to 2006.

‘‘It’s very, very troubling,” Perez said. ‘‘Foreclosures not only have a significant impact on individuals, but on neighborhoods and communities.”

And they can also affect the economy. In Maryland, many lenders and brokers have been laid off, Perez said. One major impact was the bankruptcy of American Home Mortgage Investment Corp. in early August.

The Governor’s Homeownership Preservation Task Force, which Perez co-chairs with Department of Housing and Community Development Secretary Raymond Skinner, plans to make recommendations related to the foreclosure increase to the governor in October.

Prince George’s County saw more foreclosures than any Maryland county in the first seven months this year, with some 2,800, more than triple the number from the same period in 2006. Montgomery County was next with almost 1,300, compared with only some 150 the previous year.

Baltimore City, which dominated foreclosure activity in Maryland in 2005, is fourth so far this year, also behind Baltimore County.