Over the course of the foreclosure crisis in Prince George’s County, the dumping of mortgages became a viable choice for some struggling homeowners. While many people fought through the process to save their homes and loss, some simply walked away from the mortgage and the property.

“People have walked away from their mortgage and simply said ‘goodbye’ to the debt,” said James Dula, chairman of the Maryland branch of the Southern Christian Leadership Conference and former chairman of the Prince George‘s County Chamber of Commerce. “Now, their credit rating is affected for at least the next seven years and their purchasing power is tremendously affected in many ways therefore, they will not be able to reinvest in the county or state in which they live.”

Experts recommend mediation as opposed to dumping property. This especially true now that Maryland has enacted a law giving homeowners the right to ask for mediation as soon as the foreclosure process begins.

“The goal of the law is to help homeowners get relief through a loan modification if they qualify or to find an alternative to foreclosure,” says a statement from the Maryland Home Owners Preserving Equity (HOPE) office. “The law gives homeowners a new opportunity to meet with the lender and an independent party to ensure that alternatives to foreclosure have been considered and evaluated.”

Even with this help available, many families saw mortgage dumping as the only option, despite the long-term repercussions to their credit and purchasing power. But there is some good news. With the economy showing signs of improvement, the problem of families dumping their mortgages has decreased. Assistance from state and county agencies has provided relief to homeowners and foreclosure rates have decreased to 1 in 180 housing units in June 2010 as opposed to 1 in every 74 units from June 2009.

Very good news. But it took a while for everyone to notice one of the more invisible negative effects mortgage dumping has on the community.

When owners walk away, with or without advance notice to the mortgage companies, properties sit vacant and no one cares for them. These homes, over time, suffer, making them unattractive, targets for vandals and safety hazards for the neighborhoods.

This became such an issue in Prince George’s County, Councilman Will Campos, D.-Dist. 2, sponsored legislation, that was passed, requiring vacant homes to be registered so the county can keep track.

The law went into effect on Aug. 21, 2009 and states that a person responsible for a vacant property must register it with the Prince George’s County Department of Environmental Resources. A $50 penalty is assessed for each day the property remains unregistered once it is vacant.

“As the author and sponsor of this legislation, it was my goal to create a registration system for foreclosed properties that would help identify these properties before they become eyesores in the community,” Campos said in a statement. “All too often we learn about foreclosed properties after their condition makes it plainly obvious. This registration system will give us advance warning and allow the county to proactively handle these properties.”

Once a property is registered, according to the legislation, the county, using the fees from assessed penalties, provides basic landscaping and repairs vandalism until the property is sold.

While no statistics are available on how well this is working, studies show that well maintained properties are easier to sell and do not have a negative impact on the value of property in the rest of the neighborhood.

Things are starting to look up, but the crisis is still not over. Officials ask that anyone struggling with their mortgage visit www.mdhope.org or dial the hotline at 1-877-462-7555.

 

George Barnette

Special to the AFRO