Annapolis, MD – Maryland can prepare for a possible upsurge in new foreclosures by adopting reforms that get foreclosed and vacant properties back on the tax roles as quickly as possible, Secretary Skinner said during testimony before state legislators Thursday.

Testifying before the Senate Judicial Proceedings Committee on the findings of the Maryland Foreclosure Task Force, Secretary Skinner and Department of Labor, Licensing and Regulation Secretary Alexander Sanchez warned that the nature of the crisis may have changed but it is still with us. Read the task force report.

“While the data shows a significant decrease, we think foreclosures are going to be a problem for some time to come – at least until the national housing market recovers,” Secretary Skinner said.

Committee members said many of their constituents were still finding it hard to work with lenders and were still being told that housing counselors cannot help them save their homes. The Judicial Proceedings Committee is chaired by State Sen. Brian Frosh, of Montgomery County and co-chaired by State Sen. Lisa Gladden, of Baltimore.

Secretary Skinner pledged that DHCD’s successful Mortgage Late? Don’t Wait! foreclosure prevention forums, would continue to be held throughout the state. Those forums bring homeowners, counselors, pro bono attorneys and lenders together for face-to-face sessions aimed at finding sustainable alternatives to foreclosure that all parties can agree to. See a schedule of upcoming events. DHCD has participated in more than 539 such events since the crisis first hit, reaching more than 107,000 people.

JANUARY 24

Crownsville, MD – When Secretary Skinner met with the Maryland Affordable Housing Coalition at its annual meeting recently, he agreed to consider moving the upcoming competitive round for Low Income Housing Tax Credits. The original date had been set for Sept. 11. Some members asked the date be moved up to this spring.

However, two important factors have convinced the secretary not to change the date from Sept. 11.

First, Governor  O’Malley announced the Rental Housing Works initiative, which will provide the largest increase in state appropriations for rental housing in DHCD’s history.  While the funds will be available beginning in July 2013, much needs to be done to ensure passage of the initiative by the General Assembly and setting the criteria for accessing the funding. Projects seeking funding will be able to apply in conjunction with their Multifamily Bond Program application and will not have to wait for the next competition.  DHCD is committed to working closely with MAHC and its other partners to ensure the effective and timely disbursement of these funds in conjunction with DHCD’s Multifamily Bond Program.   This effort will take everyone’s concentrated attention through the Spring 2012.

Second, at the recent Housing Finance Institute sponsored by NCSHA, Secretary Skinner was able to consult with industry experts including other housing finance directors, investors, and developers about the impact of the change in the 9 percent flat rate and other critical issues facing the tax credit program.  There was general consensus that it would be prudent to require applications to show financial feasibility using the floating rate for 2013 awards, particularly new construction.  Investors indicated that they would be looking for placed in service dates of October 2013 or sooner to use the flat rate.  This information helped Secretary Skinner to ascertain that the change in the 9 percent rate did not warrant advancing the planned date for the 2012 round. 

Secretary Skinner appreciates the partnership the department enjoys with MAHC, HAND, ABCD and its other program users.  He will continue to thoughtfully consider their comments and concerns and seek their advice as he develops Rental Housing Works and other DHCD initiatives.

Maryland foreclosures last year hit the lowest level since the collapse of the national housing market in 2007, according to year-end data from RealtyTrac, and the state ‘s foreclosure rate now ranks in the bottom tier in the country. See the fourth quarter report.

There were 14,421 foreclosure events in Maryland last year, the California-based real estate monitoring firm reported. That’s compared to 42,446 events in 2010; 43,248 events in 2009; 32,338 events in 2008; and 18,879 events in 2007. In 2006, the last full year before the crisis struck, Maryland had 3,094 events. “Events” include notices of default, foreclosure sales and lender purchases, but individual households are not counted more than once in the data.

A significant factor in the fall in foreclosures has been the reforms enacted in Maryland under the leadership of Governor Martin O’Malley and Lt. Governor Anthony Brown. Before those reforms, foreclosures sped through the courts, sometimes taking as little as 15 days. Families found they had lost their home before they fully realized what was going on.

Today, the process takes an average of 634 days, one of the longest in the nation. New York ranks first with an average 1,019 days. The extra time gives financially beleaguered homeowners additional time to consult with foreclosure prevention counselor and attorneys to learn more about their options. Some analysts warn however that there may be a future upsurge as pent-up foreclosures work their way through the system.

On Jan. 12, the Maryland Foreclosure Task Force issued its final report recommending additional reforms, including tax incentives and the creation of a statewide registry that would help move foreclosed and vacant properties back onto the market quicker. The panel also urged lenders to adopt industry best practices, including greater use of loan modifications.

Visit DHCD’s MDHOPE website to learn more about the resources available to homeowners through programs such as foreclosure mediation and the HOPE Counseling Network. Since 2007, the network has helped more than 70,000 homeowners, achieving positive results in 92 percent of the cases completed.

In response to the ever-evolving nature of Maryland’s foreclosure crisis, a task force is recommending a mixture of new legislation and industry best practices to help financially beleaguered homeowners either preserve their homes until they get back on their feet or find a ‘dignified exit.’ Read the full report.

The Maryland Foreclosure Task Force released its final report on Jan. 12. Governor O’Malley has convened three panels since 2007, as the crisis moved from homeowners trapped in predatory subprime loans to homeowners caught in the prolonged economic downturn.

The panel called for new legislation that would introduce the option of foreclosure mediation earlier in the process; create a centralized foreclosed property registry and create a tax credit for people who buy a foreclosed property as their principal residence.

Recommended industry best practices included the use of extended forbearance allowing homeowners in financial distress to make monthly payments based on 31 percent of their income until they get back on their feet; and increased use of loan modification and refinance options. The task force also recommended increased use of structured liquidation options that would soften the impact on borrowers who are forced to relinquish their homes.

The task force was chaired by Secretary Skinner and Alexander Sanchez, secretary of the Department of Labor, Licensing and Regulation. Its members included legislators, the judiciary, consumer advocates and representatives of the banking industry.

JANUARY 18

Annapolis, MD – DHCD will counsel an estimated 19,000 homeowners facing foreclosure and assist 185 new or expanding small businesses under Governor O’Malley’s proposed FY 2013 budget.

The governor presented his proposal on Jan. 18, saying it invests in job creation and its key ingredients: education, innovation and rebuilding Maryland’s infrastructure. Learn more about the governor’s budget.

“Our budget is a pro-jobs, pro-opportunity, pro-growth budget that takes a balanced approach of cuts, revenue and investment,” Governor O’Malley said in a release.

The proposal maintains state spending for DHCD’s programs. It includes significant new resources to help low income Marylanders reduce energy expenses through the agency’s Weatherization Assistance Program and more than $33.7 million for the neighborhood revitalization division, including programs that support the governor’s Smart, Green and Growing priorities. The FY 2013 allowance includes $7 million for Sustainable Community Tax Credits that support revitalization projects in historic areas and existing communities; $6 million in the Community Legacy program to support mixed use development projects, streetscape and structural façade improvements in those communities and $5 million in the capital budget for bond-funded competitive awards to assist with redevelopment and revitalization in targeted distressed communities.

The $4.25 million slotted for the Neighborhood BusinessWorks program will assist 185 businesses and support the creation or preservation of 800 jobs.

The capital budget also includes $15 million for the Rental Housing Works program that the governor unveiled on Jan. 12. That initiative will support an estimated 1,100 jobs. See highlights.

Crownsville, MD – Secretary Skinner ‘warned’ members of the state’s Weatherization Network to prepare for a daunting new challenge – lots of new resources.

“Success breeds success,” Secretary Skinner said during a Jan 13 briefing with representatives of the Local Weatherization Agencies.

In an era of fiscal austerity, the highly successful Weatherization Assistance Program could be getting millions of dollars from several sources, including more than $70.5 million for three years that the Maryland Public Service Commission ordered through the EmPOWER Maryland program; and $50 million through Governor O’Malley’s settlement agreement in the proposed merger between Constellation Energy Group and Exelon Corp.

The program also expects an additional $20 million for three years through the U.S. Department of Energy’s Energy Efficiency and Conservation Block Grant program; another $1.5 million through the Low Income Home Energy Assistance Program; $1.25 million for two years through a pilot Energy Innovation Fund with Baltimore City and the MacArthur Foundation; and $1 million for one year through the Regional Greenhouse Gas Initiative.

Those resources could kick-in just as Recovery Act funding is winding down.

The program’s biggest selling point is its track record. During the Recovery Act period, Maryland’s Weatherization Assistance Program  improved the energy efficiency of 9,488 homes and replaced 1,116 furnaces. The Department of Energy estimates that each household retrofitted through the program will save on average $350 a year on energy costs – money they can use on other essential expenses, such as school supplies, health care or transportation. The 18 Local Weatherization Agencies work with a network of more than 60 contractors who pay over 750 full and part time employees and more than 500 individuals have participated in weatherization training through the Construction and Energy Technologies Education Consortium.

The weatherization effort contributes to Governor O’Malley’s EmPOWER Maryland initiative, one of the most ambitious energy conservation goals in the country. He has pledged to reduce the state’s energy footprint by 15 percent by 2015.

Annapolis, MD – Governor O’Malley took time during his Rental Housing Works press conference today to praise Secretary Skinner’s stewardship of DHCD, noting that foreclosures in Maryland are down to the lowest level in “years and years and years.”

“He’s fighting for every home as if it’s his own,” the governor said.

Secretary Skinner joined the governor at a construction site just a few blocks from the State House in Annapolis, where workers were clearing the ground for Obery Court/College Creek Phase II, the new construction of 63 rental units for hardworking families. The site was chosen because it illustrates the type of job-producing project that will be funded by the Rental Housing Works initiative.

Secretary Skinner noted that such affordable rental housing projects have a much broader impact on the economy than the building alone. They help stabilize neighborhoods and create jobs in construction and a wide range of related industries.

“The O’Malley-Brown administration recognizes the importance of putting housing to work,” Secretary Skinner said. “Despite a very challenging economy and some very hard choices, they have not cut our housing budget for five straight years.”

The governor responded that it is only because of effective management of agency heads such as Skinner that “we are able to protect our priorities and balance the budget.”

JANUARY 12

Annapolis, MD – Governor O’Malley predicted that his plan to put an additional $15 million into the production of affordable rental housing throughout the state would have no trouble winning approval in the legislature, because it would generate “real jobs for real people here in Maryland.” Learn more.

“Every legislator in the session that opened this week will be looking at how to create jobs,” the governor said during Jan 12 press conference announcing the Rental Housing Works initiative. “There will be a laser-like focus on jobs this year. This is an initiative that will sell itself.”

Governor O’Malley said the money invested through the Rental Housing Works initiative would spur new development throughout the state. The additional $15 million would provide gap financing for up to 20 affordable rental housing projects next year, support more than 1,100 jobs and leverage $285 million in additional investment.

Secretary Skinner joined the governor at a construction site just a few blocks from the State House in Annapolis, where workers were clearing the ground for Obery Court/College Creek Phase II, the new construction of 63 rental units for hardworking families. The new homes are part of the revitalization of the city’s historic Clay Street community through a partnership between DHCD, the Housing Authority of Annapolis, developer Pennrose Properties and the City of Annapolis. Several of the construction workers at the site live in the community they are helping rebuild, said Mark Damby, president of Pennrose Properties.

Rental Housing Initiative will provide gap-financing for new projects in DHCD’s pipeline so that the revitalization of Maryland communities like Obery can continue.

“In order for a modern economy to create jobs, you have to make modern investments and there is no ‘infrastructure’ investment as important as our homes,” the governor said.

Trudy McFall, president of the Maryland Affordable Housing Coalition, agreed. “No economy digs itself out of a recession without investing in housing to create jobs,” she said.

CROWNSVILLE, MD – Home improvement contractors from all over Maryland got a crash course on how the state’s Be SMART program can help them obtain financing for energy efficiency improvements to homes, businesses and multifamily buildings.

The $20 million loan program, funded through the U.S. Department of Energy’s Better Buildings program, advances Governor O’Malley’s effort to produce a cleaner, greener, more sustainable future for Maryland citizens by helping homebuilders make improvements that could result in energy savings of up to 30 percent. Those savings translates into significantly lower energy bills for consumers, more comfortable buildings and reduced consumption of fossil fuels.

Contractors were told during the Jan 10 educational forum that Be SMART financing can be used for the purchase and installation of equipment and materials for energy efficiency measures such as ENERGY STAR qualified HVAC systems, insulation, windows, draft stopping and duct sealing, appliances and fixtures, and water heating equipment. The forum also covered training and licensing incentives as well as an overview of Maryland’s building codes. Learn more about the Be SMART program.

Baltimore – Maryland’s Consumer Protection Division has entered into an agreement with Wells Fargo over the allegedly deceptive marketing of adjustable rate mortgages written by Wachovia and Golden West Financial –  companies that Wells Fargo acquired in 2008.

Wells Fargo has agreed to consider loan modifications for eligible homeowners who have contracts through the “Pick-a-Payment” program, using the federal Home Affordable Modification Program or Wells Fargo’s own loan modification program. The company also agreed to pay $940,056 to the Office of the Attorney General for restitution to “Pick-a-Payment” borrowers who lost their homes in foreclosure. Read the release from Attorney General Douglas F. Gansler .

The “Pick-a-Payment” program offered borrowers several options, including a loan with payments that were less than the interest actually due. According to the Consumer Protection Division, Wachovia and Golden West did not fully explain to  borrowers that their minimum payments would not cover the full interest and that their principal debt would actually increase over time.