Md. foreclosure filings skyrocket in February

Prince George's County saw nearly 1,800 foreclosure filings last month -- about one-third of Maryland's total -- as state and federal officials scramble to find a solution to the unrelenting mortgage crisis.

Nine of the 10 Washington-area ZIP codes with the most foreclosure filings in February were in Prince George's. The county's filings increased 71 percent from last February, pushing Maryland to the 10th-worst rate in the country, according to the online foreclosure tracking company RealtyTrac.

Just a few years ago, Northern Virginia was ground zero for the foreclosure crisis; Prince William County had more than 6,500 actual foreclosures in 2008, according to data from the county's assessments office. Over the past 16 months, though, the crisis has shifted from the Virginia suburbs to Maryland.

Up the river

February foreclosure filings in the Washington area:

Jurisdiction	Number of filings	Rate	Change from Feb. 2009
District	178	1/1,603	-53.03%
Montgomery County	676	1/540	-3.43%
Prince George's County	1,789	1/180	71.03%
Alexandria	63	1/1,119	10.53%
Arlington County	48	1/2,147	-21.31%
Fairfax County	575	1/684	-29.88%
Loudoun County	226	1/461	-29.38%
Prince William County	407	1/335	-35.70%
Source: RealtyTrac

In November 2008, the 10 ZIP codes with the most foreclosure filings were in Virginia. By November 2009, nine of the top 10 were in Maryland.

The collapse in the housing market hit Virginia harder at first, and now Maryland is lagging, said Andy Bauer, a regional economist at the Baltimore branch of the Richmond Federal Reserve.

Whereas Prince William suffered more from an overbuilding problem, much of the trouble in Prince George's arose from subprime mortgage lending in established neighborhoods, Bauer said.

To combat the crisis, Maryland Gov. Martin O'Malley has introduced a bill that would require lenders to prove they attempted to modify a loan before foreclosing. A judge would determine whether lenders fairly considered a loan adjustment. If a judge ruled against a lender, the company would be required to work out the terms of the loan with the homeowner.

"Anything that increases borrowers' awareness of their options is a good thing," Bauer said.

Some analysts, though, have panned the idea, arguing that it could drive mortgage lenders out of the state.

At the federal level, the Obama administration is also rolling out a program that provides financial incentives to homeowners who sell their homes at a loss -- a transaction known as a short sale -- rather than let them go into foreclosure.