Smart Keys is latest form of grant initiative to help employees live near where they work
A popular state home-buying assistance program that critics complained contributes to suburban sprawl has been renamed and retooled to encourage home shoppers to live closer to where they work.
Smart Keys for Employees is the latest name for the on-again, off-again purchasing assistance program offered in a variety of forms for much of the past 10 years by the Maryland Department of Housing and Community Development.
Unveiled with little fanfare in April, the program offers qualifying home buyers grants of up to $5,000 to help pay settlement costs, if their new residence is within 10 miles of their workplace, or in the same county or municipality.
"It's a good program, and it's working well," said William Ariano Jr., deputy director of community development in the state housing department.
Smart Keys replaced a similar program called Live Near Your Work Plus. Begun last year by the Ehrlich administration, that program drew fire from growth-management advocates because the state aid was available on any existing home within 25 miles of the buyer's workplace.
The Ehrlich administration version offered qualifying buyers grants worth up to 3 percent of their mortgage to help cover closing costs.
That aid proved popular even as the housing market began to slump last year, since the fees and taxes required to purchase a home in Maryland are among the highest in the country.
But growth-management advocates and legislators complained that the 25-mile commute allowed under the Ehrlich program undercut the spirit of the state's Smart Growth policy.
The state began offering aid to home buyers based on where they work a decade ago under Gov. Parris N. Glendening. That program, simply dubbed Live Near Your Work, was part of the Smart Growth policy that Glendening crafted to guide Maryland's development. Under it, nearly 1,000 buyers got grants of up to $3,000 when buying homes in neighborhoods targeted for revitalization.
Ehrlich administration officials defended their more expansive approach, arguing it was intended to help suburban and even rural buyers, and not just the Baltimore City residents, who got the lion's share of the aid under Glendening.
The O'Malley administration's approach reins in the distance a buyer may live from work, but remains more liberal than the original aid program. Ariano said the new program attempts to be faithful to the Smart Growth policy of encouraging more compact development while also being relatively simple to follow.
"How do you incentivize somebody who is working in Salisbury to live where they work?" Ariano asked, "Because it's difficult in some cases to find housing in the immediate area."
Still, the housing official acknowledged that some counties are so large that the allowed commute can exceed 10 miles.
"It can be appreciable," Ariano said, "certainly [for] somebody that works in Dundalk, if they're buying a house up in Maryland Line."
Smart Keys is actually an add-on to another state home-buying assistance program, called House Keys for Employees. That initiative offers to match grants of up to $5,000 that buyers of affordable housing may receive from participating employers.
To get the additional $5,000 grants under Smart Keys, the home being bought must be in a designated growth zone called a "priority funding area." For more information on that and other state housing assistance programs, go to www.morehouse 4less.com.
The Smart Keys program has helped buyers of 60 homes so far, three-fourths of them in Baltimore, according to state figures. Buyers of those homes received a total of $409,000 in state aid, including other loans and grants.
The latest iteration of the home-buying aid program drew a lukewarm reaction from an outspoken critic of the previous effort.
"It's not quite as direct as 'Live Near Your Work,'" said Dru Schmidt-Perkins, executive director of 1000 Friends of Maryland, a growth-management advocacy group. "I'm not entirely excited about that."
But Ariano defended the name change, while acknowledging that the O'Malley administration wanted to put its own stamp on the program
"Another reason, frankly was just marketing," he said.
"You can have the greatest thing in the world, but unless you have something with a little sizzle to it, it won't take off." (By Timothy B. Wheeler |Baltimore Sun)
Friday, November 30, 2007
Monday, November 26, 2007
Ripple effect is feared from foreclosures
Neighboring houses likely to lose billions
Foreclosures on subprime home loans made to borrowers toward the end of the housing bubble will erase billions of dollars in value from neighboring properties, according to a report released yesterday by a nonprofit group.
The Center for Responsible Lending used its findings to call for Congress to enact stronger protections for borrowers facing foreclosure - such as giving bankruptcy courts the authority to allow borrowers to continue making payments - and to take steps to prevent predatory lending practices.
The center's report estimates about a third of homes nationwide - or 44.5 million homes - will see property values drop by an average $5,000 two to three years after the foreclosures of loans originated in 2005 or 2006. It estimates the total loss at $223 billion, with the greatest impact in neighborhoods with high concentrations of minority residents, who tended to be steered into subprime loans in greater numbers.
The study ranked Maryland sixth worst in the nation, with some 1.43 million properties - more than half the state's total - expected to lose $8 billion in value. California was ranked No. 1.
The estimate for Maryland was much higher than that issued last month by the Joint Economic Committee of Congress.
The committee estimated the total loss of state property values at $2.7 billion, of which about $1.1 billion was the ripple effect on nearby homes. That report forecast subprime foreclosures from the middle of this year through the end of 2009.
The Center for Responsible Lending's study projects more than 329,000 homes will lose value because of their neighbors' subprime woes in an area that includes mostly Baltimore City, with some spillover of properties in Baltimore and Anne Arundel counties. In the metropolitan area's five surrounding counties, nearly 483,000 homes will lose value, the study said.
Maryland homes will lose an average $5,597 in value, it said, ranging from an average of $9,366 in Prince George's County to an average of just under $1,000 in Allegany.
"Subprime foreclosures continue to spread throughout the country like a disease epidemic, and the losses are affecting more and more families who've lost their homes, and these losses extend to the neighbors," said Martin Eakes, the center's chief executive officer during a conference call yesterday.
Eakes blamed lenders who pushed borrowers into subprime loans, generally given to people with weak credit who then pay higher fees or interest.
Joanna Smith-Ramani, co-chair of the Baltimore Homeownership Preservation Coalition, said the number of homes the center predicts will be negatively affected is "frightening." She fears that rising foreclosures might "paralyze" revitalization efforts in the city.
Jay Brinkman, a financial economist with the Mortgage Bankers Association, which represents prime and subprime lenders, said he found flaws in the report. Price declines typically lead to more foreclosures, not the other way around, he said.
"The idea of associating price declines with foreclosures is not a valid argument, the way they have done it here," said Jay Brinkman, a financial economist with bankers association. "The way they attempted to reach out and apply it over 44 million homes is not valid."
Richard P. Clinch, director of economic research at the University of Baltimore's Jacob France Institute, said rising foreclosures and falling property values both are consequences of the popping of the housing bubble, not cause and effect.
"As the bubble bursts, property values fall," Clinch said.
Thomas E. Perez, co-chair of the Maryland Homeownership Preservation Task Force, said he can't comment on the center's figures but agrees with the premise that the effects of foreclosure reach far beyond the people losing their homes.
"The impacts are so wide-ranging," said Perez, the state's secretary of labor, licensing and regulation. "The ripple's really what we talk about. That is why it's so critical to get a handle on it."
Phillip Robinson, executive director of Civil Justice Inc., which has a network of attorneys who help clients with foreclosures, said the study may be a wake-up call for homeowners who've never had a subprime loan and expect their homes will always rise in value. (By Lorraine Mirabella and Jamie Smith Hopkins | Baltimore Sun)
Foreclosures on subprime home loans made to borrowers toward the end of the housing bubble will erase billions of dollars in value from neighboring properties, according to a report released yesterday by a nonprofit group.
The Center for Responsible Lending used its findings to call for Congress to enact stronger protections for borrowers facing foreclosure - such as giving bankruptcy courts the authority to allow borrowers to continue making payments - and to take steps to prevent predatory lending practices.
The center's report estimates about a third of homes nationwide - or 44.5 million homes - will see property values drop by an average $5,000 two to three years after the foreclosures of loans originated in 2005 or 2006. It estimates the total loss at $223 billion, with the greatest impact in neighborhoods with high concentrations of minority residents, who tended to be steered into subprime loans in greater numbers.
The study ranked Maryland sixth worst in the nation, with some 1.43 million properties - more than half the state's total - expected to lose $8 billion in value. California was ranked No. 1.
The estimate for Maryland was much higher than that issued last month by the Joint Economic Committee of Congress.
The committee estimated the total loss of state property values at $2.7 billion, of which about $1.1 billion was the ripple effect on nearby homes. That report forecast subprime foreclosures from the middle of this year through the end of 2009.
The Center for Responsible Lending's study projects more than 329,000 homes will lose value because of their neighbors' subprime woes in an area that includes mostly Baltimore City, with some spillover of properties in Baltimore and Anne Arundel counties. In the metropolitan area's five surrounding counties, nearly 483,000 homes will lose value, the study said.
Maryland homes will lose an average $5,597 in value, it said, ranging from an average of $9,366 in Prince George's County to an average of just under $1,000 in Allegany.
"Subprime foreclosures continue to spread throughout the country like a disease epidemic, and the losses are affecting more and more families who've lost their homes, and these losses extend to the neighbors," said Martin Eakes, the center's chief executive officer during a conference call yesterday.
Eakes blamed lenders who pushed borrowers into subprime loans, generally given to people with weak credit who then pay higher fees or interest.
Joanna Smith-Ramani, co-chair of the Baltimore Homeownership Preservation Coalition, said the number of homes the center predicts will be negatively affected is "frightening." She fears that rising foreclosures might "paralyze" revitalization efforts in the city.
Jay Brinkman, a financial economist with the Mortgage Bankers Association, which represents prime and subprime lenders, said he found flaws in the report. Price declines typically lead to more foreclosures, not the other way around, he said.
"The idea of associating price declines with foreclosures is not a valid argument, the way they have done it here," said Jay Brinkman, a financial economist with bankers association. "The way they attempted to reach out and apply it over 44 million homes is not valid."
Richard P. Clinch, director of economic research at the University of Baltimore's Jacob France Institute, said rising foreclosures and falling property values both are consequences of the popping of the housing bubble, not cause and effect.
"As the bubble bursts, property values fall," Clinch said.
Thomas E. Perez, co-chair of the Maryland Homeownership Preservation Task Force, said he can't comment on the center's figures but agrees with the premise that the effects of foreclosure reach far beyond the people losing their homes.
"The impacts are so wide-ranging," said Perez, the state's secretary of labor, licensing and regulation. "The ripple's really what we talk about. That is why it's so critical to get a handle on it."
Phillip Robinson, executive director of Civil Justice Inc., which has a network of attorneys who help clients with foreclosures, said the study may be a wake-up call for homeowners who've never had a subprime loan and expect their homes will always rise in value. (By Lorraine Mirabella and Jamie Smith Hopkins | Baltimore Sun)
Tuesday, November 13, 2007
Title company investigated on foreclosures
Cornerstone Title and Escrow, located in the 8100 block of Sandy Spring Road, is being investigated by the Maryland attorney general's office for allegedly using illegal practices to attract customers facing foreclosure.
A complaint was filed Oct. 30 by Attorney General Douglas Gansler in the Baltimore City Circuit Court against Cornerstone, In the House Technologies (a debt relief company in Upper Marlboro) and four individuals.
According to the complaint, the companies and individuals falsely promised homeowners facing foreclosure they would help them keep their homes.
State officials allege that in many cases, the customers ended up losing their property and having their equity stripped by the foreclosure rescue companies.
"They were taking title of the homes, refinancing them and getting the equity out, and then charging the homeowners higher rents than their mortgage payments, so they couldn't save money to keep their homes," said Gansler spokeswoman Raquel Guillory.
Cornerstone Title and Escrow has offices in Laurel, Washington, D.C. and Baltimore. Not associated with the much larger, California-based Cornerstone Title, the Laurel company provides various property title and settlement closing services, according to its Web site.
Sean Adecula, owner of the Laurel office, declined to comment on the allegations. But his attorney, Robert Gittins said, "All Cornerstone did was provide settlement services to clients and has nothing to do with foreclosures. Cornerstone did not provide services to save homes from foreclosure."
Gittins added that he is still reviewing the complaint and has 30 days to respond.
(by Gwendolyn Glenn, LaurelLeader.com)
A complaint was filed Oct. 30 by Attorney General Douglas Gansler in the Baltimore City Circuit Court against Cornerstone, In the House Technologies (a debt relief company in Upper Marlboro) and four individuals.
According to the complaint, the companies and individuals falsely promised homeowners facing foreclosure they would help them keep their homes.
State officials allege that in many cases, the customers ended up losing their property and having their equity stripped by the foreclosure rescue companies.
"They were taking title of the homes, refinancing them and getting the equity out, and then charging the homeowners higher rents than their mortgage payments, so they couldn't save money to keep their homes," said Gansler spokeswoman Raquel Guillory.
Cornerstone Title and Escrow has offices in Laurel, Washington, D.C. and Baltimore. Not associated with the much larger, California-based Cornerstone Title, the Laurel company provides various property title and settlement closing services, according to its Web site.
Sean Adecula, owner of the Laurel office, declined to comment on the allegations. But his attorney, Robert Gittins said, "All Cornerstone did was provide settlement services to clients and has nothing to do with foreclosures. Cornerstone did not provide services to save homes from foreclosure."
Gittins added that he is still reviewing the complaint and has 30 days to respond.
(by Gwendolyn Glenn, LaurelLeader.com)
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