The foreclosure spike in Maryland and across the nation has lenders scrambling to remove homes from the worst possible location ? their portfolios.
The Baltimore area has fared well amid the mortgage turmoil in recent months, but foreclosures statewide are still up 491 percent in the third quarter from the year before, according to research firm RealtyTrac.
Realtors and lenders said banks are working to sell that sudden stock of homes rather than keep them on their books.
“The banks are not in the business of being homeowners, they?re in the business of lending,” said Carole Maclure, president of the Maryland Association of Realtors. “The banks I work with are not willing to carry a portfolio of foreclosed properties.”
The pressure to sell comes from banks? investors, said Shane Backer, a branch manager and senior loan officer at Robbins & Lloyd Mortgage in New York.
“The more they hold on to these properties, the less money they have to invest in other things,” Backer said. “Having the foreclosures on their books is the worst thing they could do.”
During the real estate boom of several years ago, most foreclosure sales in the area were in the range of $100,000 and less, and many were in Baltimore City, according to David McIlvaine Sr. of Keller Williams Realty in Ellicott City.
Now, McIlvaine said he sells foreclosure properties in the $600,000 to $800,000 range around the region. “We?re looking at foreclosure spreading across all economic levels.”
McIlvaine said foreclosed properties in the city have generally been taking longer to sell, while in the surrounding counties, it depends on the neighborhood. In most cases, local Realtors work with banks to help set a price range.
“Most of these banks are not local ? they?re mostly in California or Texas. They really rely on us, the local agent, to be their eyes and ears,” he said.
Maclure and McIlvaine said prospective buyers of a foreclosed property should understand that the property is usually sold “as is.” Also, the deal may take longer than usual as the offer works its way through multiple layers of a large company.
“It isn?t like having a seller sitting there and accepting or rejecting their offer,” Maclure said. “You?ve got to have more patience and more fortitude.”
