Budget Proposal Offers No Aid for Foreclosures

Despite Pledge, Johnson Opts Against Assistance Because of County's Deficit

After months of promising financial assistance to county residents facing foreclosure, Prince George's County Executive Jack B. Johnson (D) has decided not to include the money in next year's budget because of the county's dire financial situation.

Thomas M. Thompson, director of housing and community development, asked the County Council on March 19 to allocate nearly $10 million on a foreclosure assistance plan to help keep more than 800 residents from losing their homes. He said the county has largely focused its efforts for months on counseling and financial literacy to help homeowners.

But more needs to be done, he said.

Local and state housing officials predict that 25,000 homes in Maryland will go into foreclosure between January 2008 and December 2009. Prince George's is expected to have about 9,000 foreclosures during that period, Thompson said.

Government can offer counseling and financial literacy programs, but without financial assistance, "it's just hope without real help," Thompson said.

Thompson told the council that the money he requested would be added to state funds for programs the state created. Those programs, recommended by a state task force, are designed to help homeowners refinance and to provide stopgap loans at zero percent interest to homeowners.

But Thompson did not know that he was asking the council for something his boss no longer wanted.

The day before Thompson's presentation, Johnson submitted a budget that did not include money for foreclosure assistance.

When council members asked if the money was in the 2009 budget, a member of the county's budget staff said it was not, because the county was facing a $121.6 million deficit.

Council member Eric Olson (D-College Park) said he did not understand why a county department head was making a request for $10 million when the money was not included in the budget.

"I'm troubled that this is not in the budget," Olson said. "We got the budget from the county yesterday, and this wasn't in there. Now we have an agency head come to us for money. Did this just come up overnight?"

Thompson said he was under the impression that the county executive wanted to use money from the county's rainy day fund to pay for the program.

But the budget staff member interjected and said the county executive made the decision that "we can not afford it at this time."