Foreclosures surge in Baltimore, symbol of the US housing crash

Foreclosures are surging again in Baltimore, which became a symbol of the US housing crash when the city's desolate blocks of abandoned terrace homes served as a backdrop for the HBO TV series The Wire.

Maryland's biggest city saw foreclosures almost triple in July from a year earlier to 2,073, the biggest gain among the 20 largest US metropolitan areas, according to data released recently by RealtyTrac. Baltimore was one of five cities, including Miami and New York, that showed more properties getting default, auction and repossession notices, bucking a 32 per cent nationwide decline to 130,888.

More homes are being seized after banks broke the legal logjam of state legislation and court rulings that kept some lenders at bay after the housing boom went bust in 2008. Foreclosures stalled in 2010 when Maryland passed a law requiring banks to try alternatives to eviction.

"These are not new loans going bad," said Daren Blomquist, vice-president of RealtyTrac. "This second wave of foreclosure activity is the unintended consequence of more aggressive prevention efforts on the parts of some states during the housing crisis, which initially slowed down activity."

Nationwide, 71 per cent of loans in foreclosure were originated between 2004 and 2008, according to RealtyTrac.

Sombo Hilton, office manager for a non-profit group that promotes home ownership in Baltimore, lost her US$250,000 house to foreclosure earlier this month. She bought the property, located about 10 kilometres outside the city, with no down payment in 2008, she said. She was making US$33,000 a year working for Habitat for Humanity.