For what its worth, I think the Post is somewhat disingenuous in acknowledging that state officials knew the inevitable was coming. While it is true that some rhetoric acknowledged that the state was just delaying the inevitable, other statements suggested that the state was taking preventative measures.
The article does contrast the Maryland foreclosure process, which has been painfully drawn out over an average of 575 days (among the longest), with Virginia, whose foreclosure crisis has largely run its course (an average of 184 days, the shortest in the nation). I will be very curious to see economists do a post-mortem comparing Maryland's heavy-handed, interventionist approach to foreclosures vs. Virginia's hands-off approach.
What this article fails to deliver is a definitive verdict on Governor O'Malley's policies: is the second wave worse than it would have been if the state had just allowed foreclosures to happen? Or have they, as expected, made things worse?
In at least one measurable way, these policies have made things worse. Maryland's intervention has delayed the recovery of housing prices in Maryland, as predicted last year. As a result, homeowners not affected by foreclosures have felt the impact because their mortgages continue to be underwater. Delaying foreclosures in Maryland is akin to people choosing not to vaccinate their kids; as a result, the herd immunity (so to speak) suffers. I like to think of timely foreclosures acting as a firewall to the spread of more foreclosures. When foreclosures are delayed, everyone suffers through lower housing prices.