One year after a coalition of state agencies made its first report on Maryland’s soaring foreclosure numbers to Gov. Martin O’Malley, those same agencies on Monday said resulting legislation has helped keep homeowners in their homes.
State Department of Housing and Community Development Secretary Raymond Skinner joined other state officials to tout the impact of several state programs aimed at easing mortgage payments for homeowners at risk of foreclosure.
The number of foreclosure events in Maryland, including default notices, auction notices and bank repossessions, totaled 7,974 in the third quarter, said Massoud Ahmadi, director of planning and research for DHCD. The state does not track those numbers independently but uses those provided by online foreclosure marketplace RealtyTrac and reviewed by state officials.
Ahmadi said the number of events would have reached 12,531 in the third quarter if the state had not taken action earlier this year. This spring, O’Malley signed into law state aid including the Lifeline Refinance Mortgage Program and Homesaver Refinance Mortgage program, designed to renegotiate troubled mortgages into more manageable payments.
As of Oct. 30, the state had secured 100 total loans for $18.8 million through state programs. Skinner said the state has assisted 11,000 homeowners in various stages of foreclosure and achieved 4,000 “positive outcomes,” including renegotiated terms or short sales to sell their home and move them into more affordable accommodations.
But Skinner called those numbers “relatively modest” and said the state must balance individual help with more sweeping structural reform of the mortgage system.
The decline in foreclosure events due to state aid may only be temporary. Along with the aid programs, state law was changed to lengthen the foreclosure process, meaning there may be a number of incomplete foreclosures that have not been reflected in the data and drive the numbers down, said Mark Kaufman, deputy commissioner of financial regulation for the state Department of Labor, Licensing and Regulation.
More concrete help is on the way. The state has applied for $2 million in Neighborworks funds to support local housing counseling programs, following $2.4 million already provided to them.
The state will also receive $46 million of $3.9 billion authorized under the federal Neighborhood Stabilization Program to put vacant homes in the hardest-hit areas back on the market.
“We certainly don’t want that money to sit in [the government’s] bank account, we want to distribute it as rapidly as possible,” said Carol Gilbert, DLLR assistant secretary for neighborhood revitalization.
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