The number of foreclosures filed in the region is dropping — however unsteadily — but economists say new state regulations on the filing process and an upcoming nationwide investigation could prolong the foreclosure crisis.
During the third quarter that ended Sept. 30, foreclosure filings fell by 41 percent in the District, by 4.8 percent in Maryland and by 8.5 percent in Virginia when compared with the corresponding three-month period in 2009, according to RealtyTrac.
But some areas saw an uptick in foreclosures during the last month. Virginia’s foreclosure rate in September was the highest in the region with one of every 556 households filing. Its total filings that month — nearly 6,000 — was a 3 percent increase over September 2009 and one of the highest monthly totals for the state since 7,245 filings in December 2008.
Andy Bauer, a regional economist with the Baltimore branch of the Richmond Federal Reserve, attributed the upswing to the housing market’s seasonality and states’ foreclosure prevention efforts delaying the process.
But it’s also indicative that such efforts, along with a recently launched federal investigation into deceptive foreclosure practices, could slow down the recovery.
“We have this glut of homes that needs to be worked through,” Bauer said. “It’s a painful process for homeowners, but the foreclosure process is necessary and we need to work through it as quickly as possible in order for the housing market to bottom out and begin to strengthen.”
