Commissioner John L. Thompson Jr. believes the county will weather the storm.

Some jurisdictions will not be so lucky. A recent report by the National Association of Counties shows Montgomery County anticipates a $297 million shortfall due to mortgage and foreclosure fallout.

"It is the national government's decision to bail out those involved in subprime lending that is a travesty," Thompson said. "The Federal Reserve is, in effect, swapping the bad loans for treasury securities. The result would be no different than if the Fed simply printed enough money to buy up the bad loans."

Homebuyers who were frugal and only purchased homes they could afford are being punished by the debasement of their savings, Thompson said. "Those who purchased homes they could not afford will see their improvident actions rewarded by the bailout."

It was evidence, he said, the country is moving away from a relatively free enterprise system to a political economy where profits of economic endeavors in good years are privatized and in bad years are socialized by bailouts.

What happens

Foreclosure notices are sent to the county's treasurer's office showing how and when a sale of foreclosed property will take place, said Lori Decker, director of the treasury for Frederick County, via e-mail.

The county is seeing foreclosure notices at a rate of 50 to 100 per week, Decker said.

Actual foreclosures have increased to 25 or more each week, compared to 25 a month, Decker said.

"Without this foreclosure activity our recordation tax would be almost nonexistent," Decker said. "For example, one developer used to record 25 to 30 deeds per week, now they bring two to six deeds for recordation per week."

When a bank or mortgage company forecloses and actually transfers the deed to themselves, the county collects the recordation tax. When the property is sold or transferred to a third party, recordation tax is collected on that transaction as well, Decker said.

"The only exception to this is if the foreclosing entity is a government entity, such as Farmer Mac, Freddie Mac, etc.," she said.

Property taxes are paid prior to any transfers and the county raises money through the tax sale as well.

"So foreclosures have really no effect on the property tax revenue," Decker said.

Holding on to the money

In a recent talk with the Chamber of Commerce, Robert F. Millikan of BB&T Asset Management, said banks and other lenders are tightening loan requirements not just because of the subprime crisis, but because they may need the money themselves in an uncertain economy rather than lending it out to the public.

Millikan also predicted the next bubbles to burst will be commercial real estate and commodities.

At this point, the commercial real estate market locally has been stable, if not strong, but like everything else, it too, could change with the falling economy.

SUBPRIME LENDING & FORECLOSURES Homeowners around the nation are struggling to make mortgage payments, and Frederick County is no exception. The map below show the area with the lowest and highest concentration of subprime mortgage loans. Click the map for a larger image. SEARCHABLE DATABASE Search the list of foreclosures filed in Frederick County Circuit Court from Jan. 1 to March 18, 2008. BIZ BLOG Business editor Cliff Cumber blogs about the project. Click here to check out his blog. THE ECONOMY & ME This new online-only section houses all sorts of stories that come our way on the economy, as well as tips consumers can use to stretch their dollar a little bit further. Click the graphic to go to the section. RELATED STORIES Foreclosure: A far-reaching problem Published on May 04, 2008 Ellen Scrivens reminisces about the house that she lost due to foreclosure last August that is located off Burning Bush Drive.more » Getting hit from all sides Published on May 04, 2008 In 2006, 455 foreclosures were filed in Frederick County Circuit Court. In 2007, that number more than doubled to 1,025. more » Officials seek to help foreclosure victims Published on May 04, 2008 People facing foreclosure, or who know someone who is, will have the opportunity Monday night to hear from someone who can help. more » Comptroller: state efforts to stem Published on May 04, 2008 The effect of the foreclosure crisis will hit hardest at local budgets, according to the state's chief tax official. more » Borrowers' euphoria clouded subprime risks Published on May 04, 2008 People were so happy to be in a home that the risks of the subprime loans they signed up for went right over their heads. more » Budgeting measures may protect county from foreclosure trouble Published on May 04, 2008 With conservative budgeting, Frederick County is prepared financially for effect from the local economy caused by the foreclosure crisis. more » Signs of trouble Auctioneers saw dangers of subprime loans coming Published on May 04, 2008 Auctioneers saw it coming. They knew the subprime loan frenzy would cause many homeowners to mortgage their futures. more »