Friday, May 23, 2008

Legislators, lenders offer help

Hoyer, Middleton meet with at-risk homeowners

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Foreclosures are everyone’s problem, say some lawmakers.

That’s because even if one homeowner can pay a mortgage on time, vacant homes next door mean declining property values for the whole neighborhood.

And to stop the housing crisis from spiraling even further out of control, the public needs to be aware of what’s available to them and the government must step in, U.S. House Majority Leader Steny H. Hoyer (D-Dist. 5) of Mechanicsville and state Sen. Thomas McLain Middleton (D-Dist. 28) of Waldorf said at recent foreclosure workshops.

‘‘If our neighbor is at risk of foreclosure, it will affect us. So we all need to be concerned,” Hoyer said at a crowded gathering in Waldorf, attended by concerned homeowners, lenders, servicers, housing counselors and other real estate professionals.

‘‘It doesn’t do a community any good to drive in your neighborhood and see for-sale after for-sale after for-sale sign,” Middleton said at a workshop in La Plata. ‘‘People are really down and out.”

The officials set up the workshops to educate homeowners in trouble about initiatives that could help them. When asked by one speaker to show whether they or someone they know was facing foreclosure by show of hands, almost all 150-plus in attendance raised their hands.

Foreclosures could cause a loss of about $12 billion in Maryland’s tax base and the Pew Charitable Trusts estimate about 61 percent of all Maryland homeowners will feel the spillover effects, with an average drop in home value of $9,941, Hoyer said.

Washington Mutual, Chase, Citibank, Countrywide, Wells Fargo and Wilshire banks, along with Freddie Mac and Fannie Mae, set up tables at the workshop to meet with customers in foreclosure trouble to try to work out an agreement. Organizations including the Southern Maryland Tri-County Community Action Committee, Acorn Housing Corp. and Maryland Department of Housing and Community Development set up tables for people to sign up for housing counseling. Maryland Legal Aid was also on hand to provide legal assistance to those who may have been scammed by foreclosure rescuers or misled by loan companies.

Clarence Snuggs, deputy secretary of the Maryland Department of Housing and Community Development, said a new initiative to launch a marketing campaign about pre-foreclosure options should help, noting about 680,000 postcards were sent to homeowners in high-risk ZIP codes throughout the state detailing contact information and resource information.

‘‘Every county in the state has been impacted by this. The good news is I think the underlying economy in Maryland is strong,” Snuggs said. He said there were almost 10,000 foreclosures in Maryland in the fourth quarter of 2007 and there were more than 11,000 in first quarter of this year. There were 3,500 foreclosures in 2006.

Lines formed with people waiting to talk to each institution and they were directed to fill out information sheets while they were waiting to speak with a representative. So many wanted to talk with Wilshire Bank representatives that names were taken, with a personal response promised in the next three to five days.

But some were skeptical of the banks’ efforts.

‘‘Congressman Hoyer carries a big stick. That’s why they’re here,” Stuart Katzenberg, state director for the advocacy group Acorn Housing Corp., said of the bank representatives at the meeting. ‘‘We want to reform the banking and mortgage industry so borrowers don’t get ripped off.”

With more than 50,000 projected foreclosures in Maryland this year, state Labor Secretary Thomas E. Perez, along with Middleton at the workshop, reviewed new laws, including extending the time it takes to foreclose to 150 days from 15, tougher sanctions for unfair mortgage practices and tougher licensing requirements.

Perez said he will meet with the state’s 10 largest mortgage servicers in the coming weeks to try to persuade them to be more flexible with customers.

‘‘Loan servicers in Maryland are not doing enough to help people, in my mind and in the governor’s mind,” he said.

Wilmer R. Ticer, president of the Charles County Bar Association, said that while there may be little that can be done legally for victims of rescue scams and subprime mortgage practices before the new state laws were passed, members of the local organization would now be available to help residents for free.