Hoyer addresses foreclosures; announces recovery act

By JANE MCHUGH Staff Writer

More help for people with home mortgage and repossession problems is on the way in the form of far-reaching federal housing legislation that hasn't been seen since the Great Depression.

And the $300 billion measure comes at a critical time as the Bowie area's foreclosure rate has doubled in the past year.

The new bill, signed yesterday by President George W. Bush, offers crucial financial assistance to middle-income, first-time home buyers; expands free housing counseling to distressed homeowners; and assures federal backing for lenders. It also shores up the financial footing and oversight of troubled mortgage lenders Fannie Mae and Freddie Mac.

First-time home buyers will get a tax credit on 10 percent of the purchase price of the house up to $7,500.

The bill took effect when the president signed it.

It comes as foreclosures in the city and county climb to levels that parallel the depressed 1930s.

New figures released by the state for the third quarter of the current fiscal year show a total of 424 foreclosure actions from Jan. 1 through March 31 for Bowie's four ZIP codes, 20715, 20716, 20720 and 20721, plus Glenn Dale's 20769 ZIP code.

That's almost exactly double the number of foreclosure actions for the Bowie area in the third quarter of last year, according to the figures from the State Department of Housing and Community Development.

The rest of Prince George's County is also suffering as foreclosures totaled a shocking 3,310 in the present third quarter compared with 1,669 for last year's third quarter.

As House majority leader, Rep. Steny Hoyer, D-Prince George's, was instrumental in crafting the new bill - the Housing and Economic Recovery Act of 2008. He appeared at a news conference Monday in Clinton with Sen. Ben Cardin, D-MD, and officials from Annapolis and Prince George's County.

All pointed out how foreclosures hurt housing values in neighborhoods where they occur; and that the bill, which gives states money to buy up foreclosed properties and create a new, affordable housing program financed by Fannie Mae and Freddie Mac, will benefit even people not facing having their homes repossessed by boosting the local economy.

Republicans as well as Democrats like the bill and Bush, who'd threatened a veto, subsequently changed his mind, Hoyer said. "The bill was passed by a significant bipartisan majority in the House and Senate, not because it was a bailout, but because it was essential to our economy," he said.

As for Cardin, he noted that the foreclosure crisis has frightened lenders from lending people money to buy houses. Unoccupied houses are staying empty and creating blight in some neighborhoods. But with its tax credit provision, the bill "will do something to get people back in the house buying market," he said.

Tuesday, County Executive Jack Johnson announced a new initiative with the state to develop a $4 million refinanced mortgage credit enhancement program to encourage local banks to refinance loans for people subject to foreclosure. Earlier this year, Montgomery County made a similar agreement with the state.

The Bowie area has suffered from the real estate bust, and has been featured on foreclosure bus tours sponsored by Realtors and has hosted a free foreclosure workshop where homeowners in trouble got free legal advice.

While many foreclosed houses in Bowie are located in newer, upscale neighborhoods dotted with McMansions, some are '60s-era Levitt houses in the heart of the city.

"Frankly, if we can help stabilize communities in Baghdad, we can save homes in Bowie, Montgomery County and throughout the state," Hoyer said at the news conference.

Afterward, he was asked if he was surprised that well-off Bowie and Mitchellville have been hard hit by the foreclosure crisis; he said he wasn't.

"Even in affluent neighborhoods, people get into bad loans and do not have a full understanding of what would happen if their mortgage values escalated. Lenders were getting people into loans at varying levels without taking care that the people could pay them back; they thought everything (about the economy) would continue to go up," Hoyer said.

For information on housing help, visit www.mdhope.org [2], and Hoyer's and Cardin's Web sites at hoyer.house.gov and cardin.senate.gov.