Saturday, June 30, 2007

The Steeds Grant subdivision in Fort Washington projects an air of comfortable affluence. Stately, spacious Colonials nestle on winding streets, their Palladian windows and backyard decks offering a vista of rolling lawns and wooded glens. Well-heeled professionals come and go; the manicured yards are tended by gardeners.

But appearances can be deceiving, as the home mortgage market turns upside down.

Three homes in this mostly black Prince George's County enclave recently were advertised as pending foreclosures. This is not a community that has had foreclosures in the past, and none of these homes looks distressed. But they are in Zip code 20744, which has the most foreclosures in the Washington area.

According to Realtytrac, a real estate information firm, about 80 homes in that Zip code received notices of pending foreclosures from January through May, almost double the rate from the same period a year earlier.

"It is a national phenomenon, and it was pretty much expected based on the kinds of loans and refinances people got into in the last few years," said Tommie Thompson, director of the county's department of housing and community development.

Homes in many price ranges in Prince George's have been affected. In the past five months, there have been 40 or more foreclosures each in the Clinton, Capitol Heights, District Heights and Temple Hills Zip codes.

Thompson said Prince George's officials expect the problem to get worse later this year. "When you lose your home, you lose your sense of self-worth, your sense of self-esteem," he said. "This is a middle-class crisis as much as a moderate-class crisis. These aren't people who are used to turning to the government for assistance."

The problem loans include the so-called "exotics," nontraditional loans in which payments are low at first but shoot up about one to three years later. In addition, the Consumer Federation of America says about 43 percent of residents in the largely black county who bought or refinanced their homes in 2005 received high-interest loans, about 3 percentage points or more above those charged to people who are viewed as good credit risks. Only about a quarter of white borrowers were given these more costly loans.

Lenders' trade groups say minorities are more likely to be charged higher interest rates because they make lower down payments and have more debt; civil rights activists say that lenders push minorities toward higher-interest loans to make more money.

-- Kirstin Downey