The Maryland Department of Housing and Community Development knows that foreclosures are on the rise in this state. The market is looking better elsewhere according to RealtyTrac Inc., but Maryland has taken a terrible hit in the past 12 months, with a 138 percent increase in pre-foreclosure activity from February 2012 to February 2013. During the same period, Montgomery County saw a 124 percent jump.
In an effort to keep homeowners in their houses, the state is distributing funds obtained from the national mortgage settlement last year to counseling agencies that work with borrowers to prevent foreclosure. The settlement is from the national lawsuit filed by states’ attorneys general against five major banks. The suit was triggered in part by the robo-signing scandal and other questionable mortgage lending and servicing practices.
While a number of life events can lead a homeowner to the brink of foreclosure, the state reckons that the lenders themselves bear some of the responsibility. During the housing boom, for example, lenders gave loans to homebuyers who were either unqualified or who would be unable to keep up the payments when balloon payments came due or adjustable interest rates increased. Lenders did little or nothing to discourage borrowers from overextending themselves now for a hefty resale profit later.
Maryland’s problems continue in part because of the state’s concentration of federal government employees. The sequester could wreak havoc with jobs in the eastern part of the state, and the ripple effect could be felt to the western border.
The state’s grants will help to fund counseling programs for homeowners whose mortgages are put at risk over the next three years. The counselors may help with money management skills, or they may suggest a fresh start through bankruptcy. When bankruptcy is an option, a borrower should consult with an experienced bankruptcy attorney before moving forward.
Source:
Southern Maryland News, “Help offered to those struggling to pay mortgage,” Nicole Clark, March 6, 2013
Our firm helps clients with mortgage and foreclosure issues. Please visit our handles similar situations to the one discussed in this post. If you would like to learn more about our Landover, Maryland, practice, please visit the mortgage issues page of our website.