Steps Towards Stabilization Being Taken in Maryland

Posted on April 16, 2009
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Federal funds are beginning to flow in and steps towards stabilization are now being taken in earnest by Maryland and other states, according to a report of Enterprise Community Partners of Columbia.

It is a non-profit group that deals with affordable housing. It has surveyed the plans of about 306 state and local governments that have received funds from the $3.92 billion given out by HUD to solve the foreclosure related crisis. This programme is part of Housing and Economic Recovery Act of 2008. From this Maryland and Baltimore have received $4.1 million and $2.6 million respectively.

Enterprise Community Partners was hitherto known as Enterprise Foundation. It had been created by James W. Rouse together with his wife Patricia. The group has surveyed the plans of 87 states, cities as well as counties. It observed that 58% of the money was targeted to purchase repossessed houses, redevelop these and sell them to low to moderate income buyers. A fifth of the funds would be utilized for financing the developers of purchasers of houses. The grant would benefit 77,000 units according the predictions of Enterprise.

The funds could also be used for setting up of land banks by demolishing the derelict units and redeveloping the vacant ones. Amanda Sheldon of Enterprise said, “This is a first great step to slow the decline of America’s neighborhoods as a result of the crippling foreclosure crisis.”

The Maryland operations are being lead by Stuart Katzenberg of the Association of Community Organizations for Reform Now. He said that the funds provided a good beginning but more has to be done to prevent further foreclosures especially for those borrowers who have gone underwater – the value of their houses being less than the loan amount. He said, “Things that are critical are, one, keeping people in their homes, and two, putting houses that have been off the market that are vacant back into service, particularly those owned by the banks that are just rotting away.” Katzenberg was keen to see judges intervene in foreclosure cases and enforce mediation and loan modifications.

The report appreciated the “promising” attitude taken by Maryland. It is allowing the applicants to make suggestions about including a ‘green’ approach while doing the refurbishing and developing of the land. It will take many years to access the success of the plan. The crux of the crisis is the containing of further foreclosures and picking up of sales without which no solution is possible.

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