State unveils plan to prevent foreclosures

Facing a historic economic mess and spikes in foreclosures, the state has finalized an agreement with six mortgage service companies to help struggling Marylanders keep their homes.

The plan to be announced today will establish a "cooling off period" for people who start to face foreclosure, halting all foreclosure actions and accrual of fees and penalties for 60 days. The companies that have agreed to cooperate with Gov. Martin O'Malley's plan are HSBC, GMAC ResCap, Litton Loan Servicing, Ocwen, Citigroup and AmeriNational Community Services.

Almost 25 percent of mortgage loans in the state will be covered by the agreement, according to the state Department of Labor, Licensing and Regulation.

Other parts of the plan will have those companies designate certain employees as "Team Maryland" to act as a point of contact for Maryland homeowners working through the state's Foreclosure Prevention Assistance Network.

Under the agreement, the companies also will create internal policies and incentives encouraging modification of loans rather than foreclosures.

The agreement comes at a time when foreclosures are rising in Anne Arundel County.

Foreclosure filings have jumped from 161 in September to 240 in October, said Lucinda Jones, the supervisor of civil records at the Circuit Court of Anne Arundel. She said the trend will probably continue this fall and filings could reach 270 or higher this month.

"We got a huge amount in yesterday," Ms. Jones said. "I do believe there is going to be a steady increase for the next couple of months."

The deal ends months of negotiations that began in February, when Mr. O'Malley criticized the loan industry for its lack of customer service and giving troubled homeowners busy signals as often as real assistance.

"The state of Maryland is committed to providing relief and offering solutions to homeowners at risk of foreclosure," he said in a release. "As a state, we have an obligation to protect our middle class families, particularly during this time of economic uncertainty."

Over the past year, Mr. O'Malley has been aggressive in changing the foreclosure process in Maryland as the implosion of the subprime and housing markets reverberate across the nation.

The governor created the "Bridge to HOPE"

Loan program, which provides small loans at zero interest to homeowners having difficulty with payments, and launched an advertising campaign to make sure troubled Marylanders don't wait to take action.

During the last General Assembly session, a host of housing reforms were passed to give people more time to keep their homes, including an extension of the foreclosure process to 150 days.

State officials encouraged Maryland residents facing foreclosure to call 1-877-462-7555 or visit www.MDHOPE.org.

"Maryland has been at the forefront of creating policies and reforms to combat the foreclosure crisis that has swept the nation," Thomas Perez, the secretary of the Department of Labor, Licensing and Regulation, said in a release. "These agreements are a critical component of our comprehensive efforts to provide homeowners with the resources and assistance they need to remain in their homes."

Some observers said the state's new agreement will help ease the situation here.

The plan is part of a "phenomenal" effort by Mr. O'Malley, said Sally Snowberger, the director of homeownership for the Housing Commission of Anne Arundel County.

"We've been working on this for a long time," she said. "People are not being foreclosed on as quickly had he not done this."

Tim O'Malley, senior vice president of sales and marketing at loan servicer AmeriNational Community Services, said his company is proud to be a part of the new agreement. Mr. O'Malley is not related to the governor.

"I think it goes a long way to put some procedures in place to help. It is the right thing to do," he said. "It is another example of the governor rolling up his sleeves and getting involved." (By LIAM FARRELL and KATIE ARCIERI, www.hometownannapolis.com)

Question 2: not all that pretty...

Please take 5 minutes and read University of Maryland's in-depth analysis and decide for yourself how you going to vote for it.
"An Analysis of the Impact of Introducing Video Lottery Terminals in Maryland"

How Maryland's real estate taxes compare nationally

The Tax Foundation is out with its list of the most expensive counties for residential property levies. Amounts are for 2007.

The highest as usual are the New York City suburbs, clocking in at a median annual tax of $7,000 or $8,000 per house. (Median means half the homes were taxed above those amounts and half below.) New York’s Westchester County tops the list at $8,422. New York, New Jersey, Connecticut and Illinois all have counties near the top of the rankings.

The U.S. county with the least expensive median real estate tax is Apache County, Arizona, at $133.

The most expensive Maryland county is Howard, with a median tax of $3,775. The least expensive in Maryland is Allegany County at $990.

Measuring property taxes in absolute dollars, however, only tells part of the story.
Taxes in Niagara County, N.Y., are only $2,802 per house. But as a percentage of home value they’re the highest in the nation at close to 3 percent.

Baltimore City has Maryland’s highest property tax as a portion of home value – 1.1 percent. Allegany County’s is nearly as high at 0.9 percent. Howard, Prince George’s, Baltimore and Frederick counties are all 0.8 percent. Everybody else is lower.

Ranked against other states, Maryland property taxes are 13th highest in the country in dollar terms, at $2,436 for the median house. But the state ranked 31st highest for property taxes as a percentage of home value and 22nd for property taxes as a percentage of homeowner income.

UPDATE: Commenters correctly point out that the Tax Foundation's tax rates as a percentage of home value for Maryland localities don't correspond to statutory rates. Baltimore City is way off -- 1.1 percent according to the foundation vs. a 2.3 percent real property tax rate on the books. I can't explain the discrepancy -- assessed value vs. market value? The foundation table's footnotes say all data are from the U.S. Census American Community Survey, using the median real estate tax paid on owner-occupied dwellings and the median value for those homes. (By Jay Hancock, Baltimore Sun)

Capitol Heights a hot spot in Maryland for foreclosure activity

Town ranks among the top county communities dealing with housing crisis

Capitol Heights is a reflection of the severity of the county's housing crisis, ranking among the top communities in the state facing a large number of foreclosures.

According to a state Department of Housing and Community Development report released in August, "Property Foreclosures in Maryland Second Quarter 2008" Capitol Heights is deemed a foreclosure "hot spot," an area that had more than 49 foreclosures in July. Based on individual ZIP codes, Capitol Heights had the highest number of foreclosures with 222. Following behind were Upper Marlboro with 219 and Fort Washington with 201.

Prince George's County accounted for about one-third of state foreclosure activity, at 32 percent, with Montgomery County at 14.7 percent and Baltimore City at 11.1 percent.

Mary Dade, a housing counseling program manager for Capitol Heights-based nonprofit United Communities Against Poverty, said 70 to 80 percent of clients in Capitol Heights seeking help were not victims of adjustable rate mortgages whose interest rates skyrocketed but had "regular old mortgages."

Dade said these were residents who refinanced their homes but continued to rack up debt. UCAP holds monthly foreclosure counseling workshops to educate residents.

Dade said she can understand why other areas such as Fort Washington and Upper Marlboro with $100,000 incomes were hard hit.

"They bought more house than they could afford," Dade said. "They bought $500,000 to $600,000 homes when their income really can't support more than [$350,000] at the max."

Residents are further impacted by a weak economy and higher cost of living, Dade said.

"Food's higher," Dade said. "Gas is off the charts. Energy. People are just having a hard time trying to live and that fixed income does not go as far as it used to. We've got a lot of societal issues and economic issues impacting on this mortgage crisis."

Lloyd Baskin, manager of the Department of Housing and Community Development's Homeownership Center, said the Capitol Heights area was likely hit hard because lenders targeted black senior homeowners whose home values increased by double-digit percentages in the 1990s and that homeowners, using a home equity line of credit and second mortgages, "cashed out" the equity on their homes.

Baskin said they could not predict how many more foreclosures the area could face.

"Suddenly one life-changing incident, like a family member losing their job or divorce, can cause folks to lose their homes," Baskin said.

Baskin said the county plans to partner with groups such as Coalition For Homeownership Preservation in Prince George's County and Prince George's Community College to hone in on problem areas such as Capitol Heights, Fort Washington and Bowie to give homeowners financial literacy training.

Baskin said programs such as the Prince George's County Mortgage Refinance Program and "Bridge to HOPE," where residents can borrow up to $15,000 to repay after a house is sold or refinanced, are available for families to get back on their feet.

Town of Capitol Heights Town Administrator James Booth said the incorporated town does not have a program in place to help residents in danger of losing their homes.

The following ZIP codes have the highest number of foreclosures in the state:

Capitol Heights (20743) – 222
Upper Marlboro (20774) - 219
Fort Washington (20744) - 201
Upper Marlboro (20772) - 167
Clinton (20735) - 152 (by Natalie McGill, www.gazette.net)