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Washington area foreclosure rates plunge

Foreclosure rates throughout the nation have been stabilizing or even dropping, providing a more positive financial picture after the recent recession. Still, some areas such as Maryland are experiencing rises in foreclosure rates, largely because of policies that slowed the execution of the foreclosures in the immediate aftermath of the housing crisis. Even though Washington, D.C., foreclosure filings appear to be diminishing, Maryland has seen a 19 percent increase because of its statewide financial policies. Maryland is the only state in the region to see an increase in filings, according to experts.

The rate increase is largely due to a 2010 law that was designed to help homeowners avoid impending foreclosures. The law put additional burdens on lenders to demonstrate efforts to modify the original loan. Banks were also fined $300 for each foreclosure notice filed. Many of those measures only stalled foreclosure rather than preventing it, according to financial gurus, who do not appear surprised at the increasing rates.

Not only has the foreclosure prevention measure been largely ineffective, but experts say it may have stunted the state's economy.

Even though the state has seen an increase in the past 12 months, the overall foreclosure rate is still lower than its peak in 2010. Those rates have fallen by about 60 percent during the past two years, according to experts, a significant improvement. The state also is in better financial position than neighboring Virginia, where one in every 124 homes is in foreclosure.

Reports show that the District is among the best-positioned areas in the nation with regards to foreclosure; its rates are down 92 percent since 2010, and only one in every 1,777 homes is in foreclosure. That improvement is largely due to the extensive rental market in the region, along with the excessive caution that often accompanies real estate transactions in that high-end market.

Nationwide foreclosure filings dropped by about 3 percent, according to statistics from RealtyTrac, a national foreclosure-tracking firm.

Source: The Examiner, "Foreclosures in D.C. region plunge over 2 years," Eric P. Newcomer, Jan. 17, 2013.

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