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)
Showing posts with label Prince George’s County. Show all posts
Showing posts with label Prince George’s County. Show all posts
Monday, September 8, 2008
Tuesday, January 15, 2008
Loan crisis in Prince George's
Home mortgage foreclosures soar
The mortgage crisis roiling communities across the country is being acutely felt in Prince George's County, where thousands of residents -- many lured in recent years by relatively affordable real estate prices -- are in danger of losing their homes.
Middle-class homebuyers flocked to the county in the early part of this decade as prices in other Washington-area suburbs surged. Now, scores of families face the threat of foreclosure, throwing one of the nation's wealthiest majority-black suburbs into what state and local officials who gathered here yesterday called an emergency.
Prince George's had twice as many home foreclosures in the first nine months of 2007 as any other Maryland locality, according to data compiled by the firm RealtyTrac Inc. and released yesterday by state officials. The firm reported that Baltimore City, Baltimore County and Montgomery County, which had the next-highest numbers of foreclosures, each had half as many as Prince George's.
Officials are alarmed by the trend -- the number of foreclosures is expected to increase drastically in coming months, as many adjustable-rate mortgage rates jump.
"Prince George's County is ground zero in Maryland's foreclosure challenge," said Thomas Perez, secretary of the state Department of Labor, Licensing and Regulation and co-chairman of the governor's foreclosure task force. "There are a disproportionate number of residents in Prince George's County who have subprime loans. Regrettably, there is a racial correlation."
At Henry Wise Jr. High School, several dozen people -- including legislators, state officials and County Council members -- discussed ways to head off the crisis. Participants proposed holding night community meetings to reach out to distressed homeowners, providing counseling and creating a county fund that would allow subprime homeowners to qualify for state aid programs.
Mortgage problems nationwide stem from factors such as people buying homes they could not afford, being deceived by unscrupulous lenders and taking out exotic loans whose interest rates have skyrocketed.
Prince George's, which sits northeast of Washington and is the state's second-largest jurisdiction with 840,000 residents, has long been a destination for African-Americans, who make up two-thirds of the population. In recent years, the county has also seen an influx of immigrants. The county's median household income -- $65,850, according to a 2006 survey -- exceeds the national average.
State officials cited data yesterday from RealtyTrac Inc., a California-based provider of foreclosure information that concedes that its numbers might be imprecise because of the difficulty in collecting foreclosure data in Maryland. But no one denies that Prince George's County has been particularly hard hit. Through the first nine months of 2007, there were more than 3,300 foreclosures, the firm says.
Stephen Fuller, an economist at George Mason University in Fairfax, Va., attributes the crisis in Prince George's to several factors, including the general affordability of the county's housing stock.
"You think of that as a strength, but it also attracted buyers who were marginally financially capable of supporting the mortgage," Fuller said.
Many people who bought homes in the county during the boom were first-time homebuyers and young families with children -- and many were so-called subprime borrowers, those with weaker-than-average credit scores. As a result, they took on adjustable-rate mortgages whose interest rates have increased beyond what they can afford.
Compounding the problem was a construction boom in the county where, unlike other areas in the Washington region, vast tracts of land had remained largely undeveloped, Fuller said.
"They just couldn't stop it," Fuller said of construction there.
Because of the sheer number of homes sold in the county this decade, the high number of foreclosures is not surprising, Fuller said.
One homeowner in danger of losing his home is Samuel Moore, a 37-year-old youth development specialist for a D.C. nonprofit.
Moore was a D.C. renter when he started looking for a home in 2006. A real estate agent suggested a four-bedroom house in the Prince George's town of Clinton, and he paid $283,000 for the house that November.
Within weeks, he said, the ceiling in the dining room caved in, pipes burst and the toilet in the main bathroom crumbled. After spending his entire savings on repairs, Moore said, he could no longer afford the house. "It turned into a money pit," he said.
He put the home on the market early last year, and so far, four potential buyers have expressed interest to his real estate agent. But he said none qualified for a mortgage.
Moore said he has not been able to find a renter and will not be able to make this month's payment.
"I thought I had enough foresight" to avoid buying a house with so many problems, he said. "I wind up exhausting all of my savings."
Caprise Coppedge, a housing counselor for United Communities Against Poverty in Capitol Heights, said an average of 10 homeowners daily seek her counseling, though she has time for only one. She said she was counseling one homeowner a week in 2006.
She said the common theme among her clients is "lack of financial literacy."
"They don't quite understand the lending process, and they're not understanding what type of mortgage they're getting," she said.
Gov. Martin O'Malley announced an initiative last summer aimed at preventing home foreclosures through credit counseling, enforcement of lending practice standards and refinancing assistance to stop what he said is a rising threat to the state's middle class.
Officials said yesterday that they must do all they can to help homeowners now because in March, a wave of homeowners will be hit with adjusted rates.
"I wish I could tell you the problem has bottomed out and things are going to get better," Perez said. (BaltimoreSun.com)
The mortgage crisis roiling communities across the country is being acutely felt in Prince George's County, where thousands of residents -- many lured in recent years by relatively affordable real estate prices -- are in danger of losing their homes.
Middle-class homebuyers flocked to the county in the early part of this decade as prices in other Washington-area suburbs surged. Now, scores of families face the threat of foreclosure, throwing one of the nation's wealthiest majority-black suburbs into what state and local officials who gathered here yesterday called an emergency.
Prince George's had twice as many home foreclosures in the first nine months of 2007 as any other Maryland locality, according to data compiled by the firm RealtyTrac Inc. and released yesterday by state officials. The firm reported that Baltimore City, Baltimore County and Montgomery County, which had the next-highest numbers of foreclosures, each had half as many as Prince George's.
Officials are alarmed by the trend -- the number of foreclosures is expected to increase drastically in coming months, as many adjustable-rate mortgage rates jump.
"Prince George's County is ground zero in Maryland's foreclosure challenge," said Thomas Perez, secretary of the state Department of Labor, Licensing and Regulation and co-chairman of the governor's foreclosure task force. "There are a disproportionate number of residents in Prince George's County who have subprime loans. Regrettably, there is a racial correlation."
At Henry Wise Jr. High School, several dozen people -- including legislators, state officials and County Council members -- discussed ways to head off the crisis. Participants proposed holding night community meetings to reach out to distressed homeowners, providing counseling and creating a county fund that would allow subprime homeowners to qualify for state aid programs.
Mortgage problems nationwide stem from factors such as people buying homes they could not afford, being deceived by unscrupulous lenders and taking out exotic loans whose interest rates have skyrocketed.
Prince George's, which sits northeast of Washington and is the state's second-largest jurisdiction with 840,000 residents, has long been a destination for African-Americans, who make up two-thirds of the population. In recent years, the county has also seen an influx of immigrants. The county's median household income -- $65,850, according to a 2006 survey -- exceeds the national average.
State officials cited data yesterday from RealtyTrac Inc., a California-based provider of foreclosure information that concedes that its numbers might be imprecise because of the difficulty in collecting foreclosure data in Maryland. But no one denies that Prince George's County has been particularly hard hit. Through the first nine months of 2007, there were more than 3,300 foreclosures, the firm says.
Stephen Fuller, an economist at George Mason University in Fairfax, Va., attributes the crisis in Prince George's to several factors, including the general affordability of the county's housing stock.
"You think of that as a strength, but it also attracted buyers who were marginally financially capable of supporting the mortgage," Fuller said.
Many people who bought homes in the county during the boom were first-time homebuyers and young families with children -- and many were so-called subprime borrowers, those with weaker-than-average credit scores. As a result, they took on adjustable-rate mortgages whose interest rates have increased beyond what they can afford.
Compounding the problem was a construction boom in the county where, unlike other areas in the Washington region, vast tracts of land had remained largely undeveloped, Fuller said.
"They just couldn't stop it," Fuller said of construction there.
Because of the sheer number of homes sold in the county this decade, the high number of foreclosures is not surprising, Fuller said.
One homeowner in danger of losing his home is Samuel Moore, a 37-year-old youth development specialist for a D.C. nonprofit.
Moore was a D.C. renter when he started looking for a home in 2006. A real estate agent suggested a four-bedroom house in the Prince George's town of Clinton, and he paid $283,000 for the house that November.
Within weeks, he said, the ceiling in the dining room caved in, pipes burst and the toilet in the main bathroom crumbled. After spending his entire savings on repairs, Moore said, he could no longer afford the house. "It turned into a money pit," he said.
He put the home on the market early last year, and so far, four potential buyers have expressed interest to his real estate agent. But he said none qualified for a mortgage.
Moore said he has not been able to find a renter and will not be able to make this month's payment.
"I thought I had enough foresight" to avoid buying a house with so many problems, he said. "I wind up exhausting all of my savings."
Caprise Coppedge, a housing counselor for United Communities Against Poverty in Capitol Heights, said an average of 10 homeowners daily seek her counseling, though she has time for only one. She said she was counseling one homeowner a week in 2006.
She said the common theme among her clients is "lack of financial literacy."
"They don't quite understand the lending process, and they're not understanding what type of mortgage they're getting," she said.
Gov. Martin O'Malley announced an initiative last summer aimed at preventing home foreclosures through credit counseling, enforcement of lending practice standards and refinancing assistance to stop what he said is a rising threat to the state's middle class.
Officials said yesterday that they must do all they can to help homeowners now because in March, a wave of homeowners will be hit with adjusted rates.
"I wish I could tell you the problem has bottomed out and things are going to get better," Perez said. (BaltimoreSun.com)
Monday, May 7, 2007
Prince George’s County tops in state for 2006 foreclosures
Prince George’s County led the state in foreclosures in 2006, and has continued that pattern for the first quarter of 2007.
A total of 1,558 foreclosures were recorded in the county last year, with 590 in the first three months of this year, up 56 percent from the same period in 2006.
But Prince George’s dubious distinction is nothing new, and was the case even before the subprime market plunged, said Darrell Carrington, a senior loan officer with Freestate Mortgage Services in Bowie.
In fact, troubles in the subprime mortgage market have not hit Maryland as hard as other states.
Of the nearly 129,000 subprime home loans serviced in Maryland in 2006, about 2 percent, or 2,580, were in foreclosure by the end of the fourth quarter, up from 1.3 percent, or 1,677, in the first quarter of last year, according to Mortgage Bankers Association 2006 National Delinquency Survey.
That’s still significantly lower than the national average of 5 percent.
Subprime loan delinquencies in Maryland also rose significantly in 2006, from almost 8 percent in the first quarter to 12 percent in the fourth quarter. The mortgage association could not provide county data.
Carrington said high home prices in Prince George’s, in relation to other nearby counties, is a factor in its high foreclosure rate.
The parents of many of today’s homebuyers needed to make a 20 percent down payment, ‘‘but those days are kind of gone,” he said.
Such a down payment on a $350,000 house would be $70,000, and most people don’t have that much cash, he said.
The result is that more of the purchase price is borrowed, resulting in higher mortgage payments.
Mortgage broker Kip S. Douglass, president of Douglass Mortgage Advisory Group in Upper Marlboro, said he has seen the rise in home loan defaults in Prince George’s County. In a listing he surveys, Douglass said, he noted 16 new notices of default filed on April 17.
That total — about double what he used to see — is no longer atypical, he said.
Some of these borrowers will catch up with payments before losing their home, some will file bankruptcy and others will work out a forebearance agreement with their lenders, Douglass said in an e-mail. Some will also try to sell the property, he said, but perhaps half will lose their home to foreclosure.
Some real estate business has been lost because people who were marginally qualified to buy a home before are no longer approved for loans, said Kevin Cyrus, assistant branch manager of Long and Foster Real Estate Inc. in Mitchellville. As the housing market has cooled, lenders are not as lenient, so buyers need either more money down or more help with closing costs, he said.
Since subprime lenders have suddenly either closed their doors or withdrawn from the subprime market, ‘‘they are no longer standing behind pre-approval letters they have already issued,” Cyrus said. The need for Realtors to scrutinize lender letters has heightened, he said.
Subprime market troubles and disappearing lenders have caused some problems, but nothing ‘‘catastrophic,” said Donald Frederick, president of the Prince George’s County Association of Realtors.
‘‘The biggest problems I’m aware of were delayed settlements, not canceled settlements,” Frederick said. ‘‘There are plenty of programs that replace these types of loans, so I don’t see the problem being as big as some people think it is.”
Banks insured by the Federal Deposit Insurance Corp., such as Bank of America, Sandy Spring Bank and BB&T, don’t dabble much in the subprime market.
Nationally, 23 percent of all subprime loans are made by FDIC-insured banks, said Kathleen Murphy, president and CEO of the Maryland Bankers Association. ‘‘It is a small percentage of the overall subprime lending market,” she said.
With some loan programs ending, and credit guidelines tightening, brokers must really be skilled at finding the right loan, Douglass said.
‘‘What’s happening is, people are starting to need more professional help now,” he said.
(Business Gazette)
A total of 1,558 foreclosures were recorded in the county last year, with 590 in the first three months of this year, up 56 percent from the same period in 2006.
But Prince George’s dubious distinction is nothing new, and was the case even before the subprime market plunged, said Darrell Carrington, a senior loan officer with Freestate Mortgage Services in Bowie.
In fact, troubles in the subprime mortgage market have not hit Maryland as hard as other states.
Of the nearly 129,000 subprime home loans serviced in Maryland in 2006, about 2 percent, or 2,580, were in foreclosure by the end of the fourth quarter, up from 1.3 percent, or 1,677, in the first quarter of last year, according to Mortgage Bankers Association 2006 National Delinquency Survey.
That’s still significantly lower than the national average of 5 percent.
Subprime loan delinquencies in Maryland also rose significantly in 2006, from almost 8 percent in the first quarter to 12 percent in the fourth quarter. The mortgage association could not provide county data.
Carrington said high home prices in Prince George’s, in relation to other nearby counties, is a factor in its high foreclosure rate.
The parents of many of today’s homebuyers needed to make a 20 percent down payment, ‘‘but those days are kind of gone,” he said.
Such a down payment on a $350,000 house would be $70,000, and most people don’t have that much cash, he said.
The result is that more of the purchase price is borrowed, resulting in higher mortgage payments.
Mortgage broker Kip S. Douglass, president of Douglass Mortgage Advisory Group in Upper Marlboro, said he has seen the rise in home loan defaults in Prince George’s County. In a listing he surveys, Douglass said, he noted 16 new notices of default filed on April 17.
That total — about double what he used to see — is no longer atypical, he said.
Some of these borrowers will catch up with payments before losing their home, some will file bankruptcy and others will work out a forebearance agreement with their lenders, Douglass said in an e-mail. Some will also try to sell the property, he said, but perhaps half will lose their home to foreclosure.
Some real estate business has been lost because people who were marginally qualified to buy a home before are no longer approved for loans, said Kevin Cyrus, assistant branch manager of Long and Foster Real Estate Inc. in Mitchellville. As the housing market has cooled, lenders are not as lenient, so buyers need either more money down or more help with closing costs, he said.
Since subprime lenders have suddenly either closed their doors or withdrawn from the subprime market, ‘‘they are no longer standing behind pre-approval letters they have already issued,” Cyrus said. The need for Realtors to scrutinize lender letters has heightened, he said.
Subprime market troubles and disappearing lenders have caused some problems, but nothing ‘‘catastrophic,” said Donald Frederick, president of the Prince George’s County Association of Realtors.
‘‘The biggest problems I’m aware of were delayed settlements, not canceled settlements,” Frederick said. ‘‘There are plenty of programs that replace these types of loans, so I don’t see the problem being as big as some people think it is.”
Banks insured by the Federal Deposit Insurance Corp., such as Bank of America, Sandy Spring Bank and BB&T, don’t dabble much in the subprime market.
Nationally, 23 percent of all subprime loans are made by FDIC-insured banks, said Kathleen Murphy, president and CEO of the Maryland Bankers Association. ‘‘It is a small percentage of the overall subprime lending market,” she said.
With some loan programs ending, and credit guidelines tightening, brokers must really be skilled at finding the right loan, Douglass said.
‘‘What’s happening is, people are starting to need more professional help now,” he said.
(Business Gazette)
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