An estimated 3,349 Montgomery County homes entered the foreclosure process in 2007, up 85 percent from the prior year, according to a report from the county’s housing and community affairs director.
Nearly half of those foreclosures came from subprime loans, Richard Nelson Jr., director of Montgomery’s Department of Housing and Community Affairs, wrote in his assessment of the county’s foreclosure situation. Nelson, along with state housing officials and Eric Friedman, Montgomery Office of Consumer Protection director is expected to brief the County Council on Montgomery’s growing foreclosure problem during the council’s Tuesday meeting.
“We have in Montgomery County what I would call clogged mortgage arteries, and we’re tryingto prevent future foreclosure heart attacks,” Friedman said, adding the county is planning public service efforts to provide help before people lose their homes. “We haven’t seen the worst yet. There are plenty more loans that are still supposed to reset between April and October this year, and in many cases, once these loans reset, the homes will become unaffordable.”
Montgomery County officials say they may work with the state to provide funding for full-time foreclosure counselors to do individual sessions with people facing foreclosure. Leaders are also developing a credit-enhancement program to encourage local banks to refinance loans for people subject to foreclosure who may not meet the standard underwriting criteria of local banks, with the county and state agreeing to assume a percentage of any losses incurred by the banks. Finally, the state and county are partnering on the Bridge to Hope program to provide up to $15,000 in zero-percent-interest loans to households threatened with foreclosure so residents can refinance and get their financial situation in order.
“People still don’t realize they can call county, state and federal offices for resources and help,” Knapp said. “And they should also call their lenders — it’s best not to hide, it is in everyone’s interest to try to resolve the situation if possible. … I think there is a general sense that most larger financial companies would like to be able to work through this with customers — the banks are losing money, too.”
