Thursday, Aug. 14, 2008

County still leads state in foreclosures

More than 2,000 owners late on mortgages this spring; counseling assistance to increase

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Prince George's County continues to top the state in foreclosures and late mortgage payments, according to a report released last week.

In a study tracking mortgage defaults in Maryland from March to June, Prince George's accounted for 32 percent of the 8,929 foreclosure-related events in Maryland. Montgomery County was second worst in the state with 1,314, according to the report from the Department of Housing and Community Development.

The Prince George's County portion includes 2,411 households that were listed as being late on their mortgage payments. The county also had 292 cases of pending foreclosure sales and 150 reports of homes being seized by banks or lenders after owners were unable to pay their bills.

Housing Secretary Raymond Skinner said the county's high amount of new and larger homes, many that were purchased with expensive subprime loans, propelled the county to the top of the foreclosures list again, citing studies that show foreclosures are more common among minorities as well.

"There is a real racial dimension to what we're seeing in foreclosures,"' said Skinner, a Bowie resident.

Skinner and others have been urging homeowners who anticipate problems paying their mortgages to seek help with refinancing and credit counseling. A state Web site, www.mdhope.org, lists resources for people facing default.

However, of the five nonprofits listed to provide housing and financial help to Prince George's residents, only one answered or returned repeated phone messages last week, and he said the organizations are feeling squeezed. State officials ask the local agencies to return phone calls within 24 hours.

"Everyone who calls, each case is radically different," said Billy Cogman, head of the Kairos Foundation in Camp Springs. "We're stretched to capacity."

Cogman and Skinner said that people seeking help should first call the state hotline at 1-877-462-7555, where workers take the person's basic information and refer them to a local group.

"That way we can triage and get a sense of what a person's issue is," said Skinner, who said the state is looking to add more counseling assistance soon.

As it has across the country, the glut of high-risk mortgage loans led to the current deluge of foreclosures in Prince George's County. Many homeowners turned to brokers offering subprime mortgages — non-traditional loans designed for people with credit problems. Subprime loans often start with lower interest rates that gradually increase.

National studies have estimated that blacks and Hispanics are far more likely to have been given subprime loans, Skinner said.

Cogman and Skinner said recent studies show about half the foreclosures result from people who never contact their lender or a counselor. This spring, state officials changed the foreclosure process to give homeowners up to 90 days to pay up their mortgage before losing their home. Until then, owners had just 15 days between being notified and foreclosure.

With 222 reports, Capitol Heights had the most foreclosure activity in the state, according to the latest report, which also listed the ZIP codes for Fort Washington, Bowie and Upper Marlboro as "hot spots" where more than 100 homes were tagged in default last spring.

The high number of people losing their homes continues to drag down the local real estate market, where people trying to sell their homes vastly outnumber those able to purchase. According to a local sales tracking company, just 409 homes were sold in July in the county, while there were 7,858 properties listed for sale. July is usually one of the highest months for real estate sales.

Low home sales have caused losses in the county government, which relied on fees from real estate transfers for a portion of its revenue. With sales about half of what they were a year ago, the county has projected a $48 million deficit for the year.

Because of state changes making the foreclosure process longer from default to seizure, the amount of foreclosure activity in the state declined in the second quarter compared to the first quarter of 2008, according to the report.

E-mail Daniel Valentine at dvalentine@gazette.net.