There was a stunning drop in foreclosure activity in the Washington region last year. On one side of the Potomac, it may mean the real estate market is improving. On the other side, it simply means the foreclosure process is stuck in low gear.
Fewer than 24,000 homes were in foreclosure in the Washington area in 2011, compared to 52,000 in 2010. That’s a drop of 54 percent, which follows the 25 percent drop we saw in 2010. Foreclosures were three times higher in 2009 than they were in 2011.
The biggest drop by far was in the District, where just 249 homes were in foreclosure last year, compared to 2,451 in 2010.
How could that be? How could the District have one-tenth as many foreclosures last year as in 2010?
“In November 2010, the D.C. City Council imposed a requirement of mediation between the lender and borrower for every foreclosure,” said Daren Blomquist, vice president of RealtyTrac, which reports on foreclosure activity. “It’s a very vigorous requirement, and many lenders are basically not even foreclosing.”
A similar law was instituted in Maryland in the latter half of 2010.
“As a result, new foreclosure activity was down 66 percent in Maryland in 2011,” Mr. Blomquist said, “while Virginia was down 47 percent.”
The mediation requirement is not the only thing that has slowed foreclosures. The “robo-signing” scandal slowed foreclosures everywhere.
Still, Mr. Blomquist said the more fluid foreclosure process in Virginia has enabled that state to emerge from the real estate meltdown ahead of Maryland.
“I would say that Virginia is further along the path to recovery,” Mr. Blomquist said. “Because they had a faster, more efficient foreclosure process, they are now past the peak in the foreclosure cycle.”
As proof of this, home prices were up in quite a few Virginia jurisdictions last year, while prices continued to fall in almost every part of Maryland.
Maryland is going to take longer to work things out, if only because the foreclosure process is taking an extremely long time there. Homes that completed the foreclosure process in the third quarter of 2010 had spent 396 days in the process. By the fourth quarter of 2011, it was taking 634 days!
In Virginia, the process was taking 132 days at the end of last year.
“It’s speculation, but some banks may now consider Maryland a more risky place to do mortgage business,” Mr. Blomquist said.
Send email to email@example.com.
By Rand Paul
Obama acts as though we no longer have a Constitution
Independent voices from the TWT Communities
Video reviews of today's hottest trends in Minecraft (servers and mods) along with a look at the latest video games with your host MCairsoft14 (alias Jerad Zad).
Columns from Voices around the World talking about the events, people, politics and social issues that concern us wherever, and whoever, we are.
Al Maurer provides a common sense, conservatarian, Constitutional conservative perspective from the battleground state of Colorado
Benghazi: The anatomy of a scandal
Vietnam Memorial adds four names
Cinco de Mayo on the Mall
NRA kicks off annual convention
California wildfires wreak havoc