Despite nationwide foreclosure issues, Maryland is remaining strong.
While 43 states reported an increase in foreclosures from the same time last year, five ? California, Florida, Michigan, Ohio and Georgia ? accounted for more than half of the nation?s total. And despite Maryland experiencing a 575 percent jump in foreclosure listings from the year before, the state sports a solid demographic of homeowners. In the National Association of Mortgage Brokers? 2006 study, Marylanders had a homeownership rate of 71.6 percent, nearly 4 percent higher than the national average.
And according to Kathleen Murphy, president and chief executive officer of the Maryland Bankers Association, the last thing banks want is to see their home loans go into default.
“It’s really important that if an individual gets behind in their mortgage that they contact their lender,” Murphy said. “A lender is in the lending business and doesn’t want to be in the real estate business. We as banks take foreclosures seriously and we have a vested interested in keeping our clients in their mortgages.”
Murphy told The Examiner more than 400,000 single-family loans were given out last year in Maryland, with 81 percent of them being prime origination loans. The MBA also said Maryland?s foreclosure percentage, 0.54 percent, is substantially lower than the national average of 1.28 percent. And of all the borrowers who go into default, a reported 65 percent never contact their lending agency.
Many banks ? which can finance loans internally ? seem to be the ones rising above the fray.
“The problems you are seeing today is about liquidity,” said Gary Geisel, chairman of the MBA and CEO of Provident Bank. “As you seen different mortgage companies being closed, it?s about them not having funding.”
Mortgage companies often have investors or finance companies that support them. When that money dries up, they are out of options. Banks, conversely, can do loans in-house, outsource them and always have resources available through deposits.
Geisel, acknowledges that while qualifications may have also tightened, consumers should still be able to qualify for a mortgage.
“If you look at the typical Maryland consumer, virtually nothing has changed,” he said. “And that’s not [putting our heads in the sand], but the typical person out there looking for a $400,000 or $300,000 probably will not have any more trouble today than if they applied three months ago.”
