The Fredrick News Post reports on the housing bubble in Maryland. "Thousands of Frederick County's so-called 'McMansions' could be back on the market in coming years as deadlines on interest-only loans come due, mortgage payments skyrocket, and homeowners' pocketbooks are stretched to the breaking point."

"It's a real concern for Mary Christine Jackman, director of the Frederick County Treasury. It should be a concern as well to the buyers of those high-end houses who pushed their financial limits five or 10 years ago to buy big. Principal payments will kick in for buyers who took out interest-only mortgages during the recent housing boom, Ms. Jackman said in a recent interview."

"That $300,000-plus home, bought with the expectation of a return on the initial investment, could become a white elephant. 'There could be thousands of homes on the market at the same time and nobody's quite sure if there will be enough equity to take the houses off the market,' Ms. Jackman said."

"A flood of vacant houses 'is one possible outcome,' said Thomas Shaner, executive director of the Maryland Association of Mortgage Bankers. 'I don't want to say it couldn't happen. It absolutely could happen, and that kind of stuff worries everyone.'"

"He was 'shocked' to find out more than 50 percent of mortgages taken out in the past several years were interest only. Impractical expectations played a part, he said. Many homeowners used an interest-only loan to buy a larger house than they really needed, instead of seeing what they could realistically afford. 'If you were stretched to the last dollar to make that work, you've got issues,' Mr. Shaner said."

"Filing for bankruptcy, or defaulting on taxes, are two of the choices homeowners could be left with. This year's tax sale was Monday. On offer for auction were 306 properties whose owners had defaulted on their annual property taxes. Despite Ms. Jackman's best efforts to reduce that number, it's a sharp increase over 2004's 235 properties and 232 properties sold in 2005. Twenty-five properties on the list were valued at more than $300,000."

"'People don't have the money, whatever the reason, and that's only going to get worse as the interest-only loans come due,' Ms. Jackman said. Twenty-five properties on the list were valued at more than $300,000. The most expensive of those, worth $510,946, is from in the Villages of Urbana subdivision. The owner owes the county $11,739."

"Thousands of empty high-end houses will have an unknown impact on Frederick's property tax revenue. The effect on the treasury, Ms. Jackman said, 'I'm very nervous about.'"

"Mr. Shaner said that from the standpoint of a county treasurer, as housing prices come down, assessments come down, and the county tax base declines. That affects the county's bottom line. 'The local governments have been riding on a wonderful windfall with everybody else as the housing market has risen,' Mr. Shaner said. 'They've had an increase in their revenues, and they haven't done a darn thing to do it, and they've got more money' without having to raise taxes."