County, State Partner on Plan For Those Facing Foreclosure

Gov. Martin O'Malley and Prince George's County Executive Jack B. Johnson agreed yesterday to help hundreds of residents in danger of losing their homes.

Under a memorandum of understanding, the state Department of Housing and Community Development will provide $2.5 million and Prince George's will give $1.5 million to develop a program that encourages local banks to refinance loans to county residents facing foreclosure.

The money will be used to insure the bank loans, state officials said.

"As a state, we have made great strides in protecting Maryland homeowners from foreclosure, but we can, and we must, do more," O'Malley (D) said yesterday. "Today's agreement will give Prince George's County another tool to help distressed homeowners and will help sustain homeowners through these difficult times."

Montgomery County forged a similar partnership with the state last week. The state is committing $2.5 million to the program in Montgomery County, and the county is adding another $2.5 million.

With the banks offering an average mortgage of $300,000, the state estimates that about 300 homeowners could be helped through the program in Prince George's and about 500 people could be assisted in Montgomery.

Department of Housing Secretary Raymond A. Skinner said Prince George's and Montgomery were selected to participate in the program because they have the highest number of foreclosures in the state and are the largest jurisdictions with available resources to commit to the program.

In Maryland, property foreclosures rose to 12,849 in the second quarter of fiscal 2008, a 13 percent jump from the previous quarter and a 214 percent increase over last year. In Prince George's, the notices of intent to foreclose reached a new high of 3,310 in the second quarter of 2008, a 186 percent increase from last year. The county accounted for 26 percent of all notices of intent to foreclose in Maryland.

O'Malley said the state is working on agreements with officials in Baltimore and other jurisdictions that have been affected by the housing crisis.

"The way we weather the storm is by pulling together," the governor said. "No county should have to go it alone, no homeowner should have to go it alone."

To qualify for the program, a homeowner would have to participate in a state-sanctioned credit counseling program.

Johnson (D) said the partnership with the state highlights the urgency of the foreclosure crisis in Prince George's and across the country.

"Today, too many of our citizens are seeing their dream disappear," Johnson said. "We can no longer sit by and watch our families lose their homes."