- The Washington Times - Friday, March 13, 2009

Last year, the number of foreclosure filings rose by 81 percent, according to RealtyTrac. The slow economy and the subprime-mortgage mess caused many homeowners to fall behind in their payments. When borrowers aren’t making payments, lenders have to try to stop the bleeding.

There was a lot of bleeding last year. Foreclosure filings in Virginia were up 200 percent compared to 2007. Filings in Maryland were up 71 percent.

To download a PDF of the chart, click here

According to RealtyTrac’s figures, 1.84 percent of all U.S. housing units received a foreclosure filing last year. In Virginia and the District, the rate was 1.5 percent last year, and the rate for Maryland was 1.4 percent. The states with the highest foreclosure rates were Nevada (7 percent), Florida (4.5 percent), Arizona (4.5 percent) and California (4 percent).

Last year’s foreclosure filings varied widely from month to month and from one jurisdiction to another. The number of homes has exploded because so many homes have entered foreclosure. That has resulted in more sales but lower prices.

The top chart shows the relationship between foreclosure sales and their selling price. Note the drop in sales in November, probably due to the election. Foreclosure filings also dropped in some jurisdictions.

Sales of foreclosures really took off last year. As more foreclosures came on the market, the banks that owned them had to accept less money to compete with all the other foreclosed properties. Lower prices led to increased buyer activity. Investors and owner-occupants took advantage of the bargains, causing sales figures to rise.

This year, broader economic woes could cause more homeowners to fall behind on their payments. Many subprime borrowers haven’t seen their mortgage rates reset yet. As that happens, and borrowers struggle to make higher payments, we could see another wave of foreclosures in 2009.

Contact Chris Sicks by e-mail (csicks@gmail.com).

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