County Workers Might Buy Foreclosed Homes

By Kristin Downey

Thursday, May 29, 2008

Virginia officials are joining the parade of local governments trying to cope with the rising tide of foreclosures by offering free mortgage-assistance clinics to homeowners at risk.

The clinics will be conducted by the Virginia Foreclosure Prevention Task Force, a new organization created by Gov. Timothy M. Kaine (D) to help homeowners struggling to keep up with loan payments. They will receive individual assistance from housing counselors trained to help people negotiate with their lenders and minimize the financial damage.

The all-day clinics will be June 21 in Chantilly and Woodbridge. The Chantilly event will be at Chantilly High School, 4201 Stringfellow Rd., and the Woodbridge event will be at Northern Virginia Community College at 15200 Neabsco Mills Rd.

Loudoun County officials, meanwhile, are considering joining the list of local governments that have launched programs to help their employees buy foreclosed properties.

Foreclosures are mounting nationwide because many homeowners are struggling to pay loans on which payments adjust dramatically upward several years after closing. These make up about 57 percent of the loans going into foreclosure, according to the Mortgage Bankers Association.

Falling housing prices have compounded the problem by making it hard for homeowners to get out from under loans by selling their properties. About 1.5 million properties nationwide went into foreclosure last year, and experts say as many as 3 million are at risk.

"Given the crisis we're experiencing with foreclosures having spiked in Virginia and throughout the nation, we felt compelled to act," said David Smith, Virginia's deputy secretary of commerce and trade.

Local and state governments are increasingly being called upon to deal with the consequences: abandoned houses, untended lawns and vandalism. There are 300 to 400 vacant homes in just one area, the Franconia section of Fairfax County, for example.

The Prince George's County Council recently agreed to spend $2.5 million on a foreclosure-prevention program. Fairfax and Prince William counties are considering plans to help people deal with the housing-affordability problem by buying foreclosed properties.

In Loudoun, which had more than 2,000 foreclosures between October and March, most of them in the Sterling area, officials are considering a different approach. Board of Supervisors Chairman Scott K. York (I-At Large) has proposed using money contributed by developers to provide low-interest loans and perhaps even grants to county employees who want to buy in Loudoun.

The program would serve a dual purpose, York said: to help workers find affordable homes and to eliminate the problem of neighborhood blight caused by the proliferation of empty, foreclosed houses.

"All of us are very concerned about the impact of the foreclosures," he said. "When you go into the Sterling community, you can see it about every street you turn on."

Last month, the Maryland legislature passed one of the nation's most comprehensive packages designed to help ease the foreclosure problem. The new laws give homeowners more time to catch up on their bills before losing their homes to foreclosure and increase penalties for people who engage in mortgage fraud.

Foreclosure is occurring in even the region's most affluent areas.

Seventy-eight foreclosures were recorded in Alexandria in the first four months of the year, up from 21 in the same period last year, said Cindy Smith-Page, the city's director of real estate assessments. About two-thirds were condominiums, and the rest were single-family houses, she said.

"It's pretty much everywhere, citywide," she said.

"The economy is struggling, particularly the housing industry," said Edward Semonian Jr., clerk of the Alexandria Circuit Court, who said that the city is experiencing a record level of foreclosures. "It's not a normal time."

Staff writer Sandhya Somashekhar contributed to this report.

Tagged: foreclosure, housing market, real estate

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