Maryland to Receive Federal Foreclosure Prevention and Neighborhood Revitalization Assistance
State to receive foreclosure aid through the Housing and Economic Recovery Act of 2008
$181 Million in housing bond funds and $1.1 Million in tax credits for Maryland
CROWNSVILLE, MD (July 26, 2008)– The State of Maryland will receive foreclosure prevention and neighborhood stabilization assistance through the United States House of Representatives Resolution (H.R.) 3221 – the Housing and Economic Recovery Act of 2008, H.R. 3221, approved by the U.S. Senate today by a vote of 72 to 13. The bill was passed in the House of Representatives on July 23 by a vote of 272 to 152.
“We heartily congratulate the Maryland delegation and members of Congress on the passage of H.R. 3221,” said Governor Martin O’Malley. “This package helps address the needs created by the foreclosure crisis, and will begin the process of turning around the housing market. This means that we now have broader and more flexible tools to help sustain homeowners through these difficult times, and stabilize the communities in which they live. These tools will help us address the persistent shortage of affordable housing options in our communities.”
The bill represents the most comprehensive response yet to the American mortgage crisis and will help families facing foreclosure keep their homes, help other families avoid foreclosures in the future, and help the recovery of communities harmed by empty homes caught in the foreclosure process. It is one of the most important housing reforms in decades.
Maryland is slated to receive $181 million in Mortgage Revenue Bonds (MRB) funds and $1,123,669 in additional Low Income Housing Tax Credits, which will generate approximately $9 million in equity. The state and local subdivisions also will receive additional Community Development Block Grant (CDBG) funds to purchase and rehabilitate homes that already have been foreclosed upon to help revitalize and strengthen communities.
The resources provided in the bill will be invaluable for Maryland, which saw foreclosure events in the first quarter grow by 617% over the same period last year. H.R. 3221 will shore up the housing market and ensure the availability of affordable home loans and strengthen neighborhoods hardest hit by the foreclosure crisis by providing resources to allow cities and states to buy up and rehabilitate foreclosed properties. The bill also expands homeownership opportunities for veterans and helps returning soldiers avoid foreclosure and stay in their homes and provides tax breaks to spur home buying. An important feature for Maryland is the creation of an Affordable Housing Trust Fund to boost the nation’s stock of affordable rental housing in both rural and urban areas for low and very low-income individuals and families. The provision of more funds to assist homeowners with foreclosure problems and legal assistance for troubled borrowers will allow Maryland to build the capacity of its HOPE network of nonprofit counseling agencies statewide. Another highlight of the bill is additional homeless funds to assist school districts where children have become homeless due to foreclosures.
According to Raymond A. Skinner, Secretary of the Maryland Department of Housing and Community Development, “The bill will expand and improve the low-income housing tax credit, which is critical to the construction and rehabilitation of affordable housing. In addition, the bill increases volume limits on housing bonds that finance low-income rental housing and allow us to assist first time homebuyers. It also gives us more flexibility on how we can use these bonds to help address the shortage of affordable housing options in Maryland.”
In the summer of 2007, the State launched the Home Owners Preserving Equity (HOPE) initiative to showcase its commitment to developing responsive solutions to assist homeowners facing foreclosure.
Governor O’Malley’s first step as part of this effort was to convene the Maryland Home Preservation Task Force which included staff from the Maryland Departments of Housing and Community Development (DHCD) and Labor Licensing and Regulation (DLLR) and other stakeholders in this issue such as federal and local government partners, community development groups, housing agencies, banking and finance organizations and non-profit foundations.
The primary goal of the task force was to assess the scope of the potential foreclosure problem in Maryland and recommend ways to prevent foreclosure and preserve homeownership. The task force evaluated existing financial assistance programs, shared ideas and best practices, identified private resources, reviewed the legal and regulatory landscape and current mortgage lending practices and, ultimately, made recommendations for improving outcomes for Maryland homeowners.
For its part, DHCD created two refinance mortgage programs, Lifeline and Homesaver, and one short-term gap loan program, Bridge to HOPE, for homeowners who may have financed their homes with exotic or unconventional loans. Since the launch of HOPE, DHCD has fielded and been responsive to more than 9,000 direct calls for assistance to its HOPE Hotline.
In addition, DHCD has provided $2,622,467 in operating support to a network of 32 nonprofit counseling agencies throughout the State. HOPE nonprofits provide foreclosure prevention assistance Statewide and are helping families throughout the State avoid foreclosure and plan for a stronger financial future. Grants have enabled these counseling agencies to increase service levels and retrain staff in response to the current national housing crisis. Counselors have provided foreclosure prevention assistance to approximately 3,000 homeowners this year.
At the end of the recent legislative session, Governor O’Malley signed a new foreclosure process into law. The new measures give homeowners protections and keep them from losing their homes to foreclosure. The laws are intended to protect homeowners from fraud and give them more time to find solutions and avoid foreclosure.
To market these resources to homeowners in need, DHCD embarked on an aggressive advertising and outreach campaign during fiscal year 2008. The campaign included participating in housing workshops and foreclosure forums as well as the development of bus, billboard and online ads, radio spots and print advertisements featuring the campaign theme, “Mortgage Late? Don’t Wait.” The Department continues to use every opportunity to market foreclosure prevention services to homeowners facing foreclosure.
Homeowners in danger of foreclosure are urged to call the Maryland HOPE Hotline, 1-877-462-7555 or click on www.mdhope.org.
