Program to stave off foreclosures

Homeowners fearful of losing their homes because of looming defaults and foreclosures could get help through a new state initiative.

Called Homeowners Preserving Equity, the HOPE program offers a commitment of $100 million in private capital to help about 500 homeowners to refinance and switch adjustable-rate mortgages to fixed-rate mortgages.

The state also plans to use $10 million from the state's mortgage insurance program as an incentive to encourage lenders to provide another $200 million to refinance another 1,000 homeowners.

The goal is to prevent an expected wave of foreclosures due to the recent proliferation of "exotic" loans which include adjustable rate, balloon payment and negative amortization loans.

"The HOPE initiative is an innovative package of foreclosure prevention measures, combining refinancing, mortgage insurance, incentives and homeownership counseling to make sure Maryland families can preserve the equity they have built up in their homes," said Ray Skinner, secretary of the state Department of Housing and Community Development, in a statement after a June 13 press conference in Dundalk.

"It is a proactive approach to address rising foreclosure in Maryland due to sub-prime loans before it becomes a crisis," he said. "We're working to protect Marylanders' greatest asset -- their homes."

The state Department of Housing and Community Development has approved more than 40 lenders to participate in the program, including several with branches or headquarters in Baltimore County.

Included are American Home Mortgage Corp., BB&T, Bradford Bank, Capital Mortgage Finance Corp., Carrollton Bank, Chesapeake Bank of Maryland, Chevy Chase Bank, Citizens Trust Financial Group, Equitable Trust Mortgage Corp., First Equity Mortgage, First Home Mortgage, First Preference Mortgage Corp., M&T Bank and Metrocities Mortgage.

Refinancing is not the only feature of the program.

The Maryland Affordable Housing Trust, administered by the Department of Housing and Community Development, is offering $1 million in competitive grants to nonprofits that provide counseling services to homebuyers.

The one-year awards cannot exceed $100,000 per organization.

In addition, Gov. Martin O'Malley has created a task force to analyze homeownership data and also possibly recommend changes in foreclosure procedures. The task force will report to O'Malley in October before the 2008 General Assembly session begins in January.

The secretaries of the Department of Housing and Community Development and the Department of Labor, Licensing and Regulation will head the task force, which will also include representatives from the mortgage industry, state agencies and housing advocates.

As of June 21, officials had not picked the members.

For more information about the HOPE program, call 1-877-462-7555 or go to www.dhcd.state.md.us.

For complaints about lending practices, call the Department of Labor, Licensing and Regulation at 888-784-0136. (Arbutus Times)