Crisis Update:
Fighting Foreclosures with the Personal Touch
Despite a nationwide effort to keep people in their homes, foreclosure filings spiked
in March as several state foreclosure moratoriums expired and lenders moved forward
with the process, according to a report from RealtyTrac, a private firm that has
been collecting data since 2005.
Maryland had more than 3,300 filings, up nearly 5 percent from February, but down
22 percent from March 2008. For the first quarter of 2009, the state had about 9,300
foreclosures. That was down more than 7 percent from the fourth quarter of 2008
and down more than 18 percent from the first quarter of 2008.
Although the state statistics are bucking the national trend, foreclosures continue
to be a problem in Maryland, particularly in Baltimore, Prince George’s, Montgomery
and Howard counties, and indications are that this crisis will continue as adjustable
rate mortgages (ARMs) Alt-A loans and similar subprime mortgage products continue
to reset.
Governor Martin O’Malley’s attention to rising foreclosures with additional funding
and legislation to extend the process for foreclosure and brokering an agreement
with lenders to work with housing counselors has made a huge impact on state and
local efforts to assist families at risk of losing their homes.
The Governor recently announced $2.5 million in federal, State and local funding
to assist homeowners facing foreclosure to support 30 counseling agencies in the
HOPE network along with two statewide legal service organizations. These supports
along with DHCD strategies have raised awareness and made assistance available to
homeowners. The “Mortgage Late, Don’t Wait” campaign to promote prompt action by
at risk homeowners, Lifeline refinancing and Homesaver and Bridge to Hope programs,
and funding to local housing counselors are all-important tools.
However, foreclosure remains an issue that requires the personal touch, says Claudia
Wilson Randall, Neighborhood Revitalization Project Manager.
She points to the success that counselors, nonprofit organizations, local communities
have had helping families as evidence that assistance needs to be tailored to meet
individual needs. These families often need compassion as well as expert advice
to help them through the foreclosure process.
“When my mortgage payment went from $2,067 to $2,405, it was more than I could afford
and I knew that I needed help,” said Linda Rice, a homeowner in Prince George’s
county. Complicating matters for Ms. Rice was a reduction in her work hours as a
nurse. She tried to renegotiate her payment terms but the mortgage company refused.
Like many homeowners, Ms. Rice was unfamiliar with the foreclosure process and feared
losing her home when she fell behind in paying her mortgage.
“By chance I heard a radio commercial about the HOPE Hotline and called. I was referred
to several housing counselors and eventually met with Mary Hunter of the HIP program
in Hyattsville. Ms. Hunter was very helpful and supportive. She kept me focused
and positive throughout the process. Even when I was discouraged by setbacks she
was encouraging and assured me that things would work out.”
With the assistance of a housing counselor, Ms. Rice was able to get a Bridge to
Hope loan to cover a portion of her arrears in the amount of $7,055 and renegotiate
with her lender to get a 30-year fixed loan at a 4.5 percent interest rate. Her
new monthly payment is $1,649.
Ms. Randall says the foreclosures hit communities like an unrelenting storm.
“In a hurricane or a tsunami, the storm comes and wipes everybody out. Imagine a
storm where the waves just keep crashing everyday, everyday, everyday. I think that’s
what our agencies are going through.”
The immediate response to foreclosure was to raise awareness about the problem and
get people to respond by seeking help through our many programs. Now the housing
counseling agencies and others on the front lines have gotten a system in place
and know what they’re doing. They’ve figured out strategies to reach homeowners
in their communities that may be in trouble or headed for it and counselors say
that is a critical part of this problem.
“These agencies and local jurisdictions are finding ways to make people comfortable
with seeking help,” says Randall.
Some organizations have figured out a triage system where everyone is invited in
on one night and then organized according to their circumstances. People who are
in immediate danger of losing their homes are separated from those who are 30, 60,
or 90 days late on mortgage payments, who are separated from those who are just
looking for information on how they can lower their monthly payment and may have
heard about the president’s plan.
As this issue unfolds there is more volunteering and ‘uncompensated activity’ taking
place in communities around the state. Many churches and nonprofit organizations
have stepped up to help. Since the crisis began, more than 800 attorneys have volunteered
and churches, nonprofits and other organizations are holding meetings, housing fairs,
and other activities to raise awareness and provide services and information.
In addition, DHCD counselors regularly participate in foreclosure events around
the state in churches, meetings, and other outreach efforts where other professionals,
including attorneys are volunteering their time. Since December 2008, DHCD has attended
nearly 50 such events and distributed nearly 5,000 brochures and pamphlets.
Now, counties are moving from foreclosure awareness to solutions. Recently Baltimore
County held a ‘Foreclosure Solution Workshop Series’ in one of its library branches.
Participants pre-registered and were instructed to bring important documents to
meet with an attorney on the spot.
Its kind of ‘all hands on deck’ says Ms. Randall. “I think people have come up with
ideas of how to get to the people who need their help, and making sure that they
take the next step and appointments are made and kept. These are the personal contacts
that will make the difference in people’s lives.”