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County Offers Free Foreclosure Prevention Help

Counseling is available Saturday. Officials warn residents to avoid lending scams.

 

When German Escobar and his daughter Jahir received a lender’s offer of a trial rate of 2 percent interest on the mortgage for their Germantown home, they were mystified.

Two months earlier, the same lender had told them that the family did not have enough income to qualify for a similar loan, Jahir Escobar said.

Trying to make sense of it all, they turned to Montgomery County for help.

This week county officials urged residents facing foreclosure to seek similar help.

County agencies will offer from 10 a.m. to 3 p.m. on Saturday at the , at 506 S. Frederick Ave., in Gaithersburg.

Trained representatives from Asian-American Homeownership Counseling, HomeFree USA, Housing Initiative Partnership and the Latino Economic Development Corporation will offer assistance at the event, which is co-sponsored by the City of Gaithersburg and the County’s Housing Fair Planning Committee.

Attorneys from Civil Justice, Maryland Legal Aid and the Pro Bono Legal Resource Center of Maryland will offer free legal advice on housing-related issues and representatives from the Office of U.S. Rep. Christopher Van Hollen Jr. (D-Dist. 8) of Kensington will be present to assist homeowners.

The county has seen 22,000 foreclosures since 2007, said Richard Nelson, director of the county’s Department of Housing and Community Affairs.

The number of foreclosures has decreased, with the second quarter of 2011 seeing about 25 percent of the number of foreclosures experienced in 2009, Nelson said.

“This is due in large measure to the good work of our counseling partners and the fact that our residents are much more aware of the fact that they can get help,” he said.

County officials also are urging awareness of mortgage modification scams like the one the Escobars encountered.

At a press conference in Rockville on Tuesday, County Executive Isiah Leggett (D) listed scams to avoid, including:

  • Companies that ask homeowners for a fee in advance.
  • Companies that guarantee they will stop a foreclosure.
  • Companies that tell homeowners to stop payments of loans and pay the company instead.

Leggett held up a sign advertising home loans at 2 percent.

“If you see this, ignore it," he said. "This is not real. This is a scam. You will pay for it up front and you will not get the services you want. There are services available, free-of-charge.”

The county has served more than 4,000 clients and sponsored 191 foreclosure prevention outreach and education events since April 2008, Leggett said.

Homeowners who have received letters from lenders or lenders’ attorneys about foreclosure, notice of intent to foreclose or notice that foreclosure action has been, or will soon be, taken should attend, he said.

“If you believe that you have a problem, come out and let us decide whether or not that problem justifies [taking] action, and whether or not there can be assistance for you,” Leggett said.

Before receiving counseling services from the county, the Escobars applied for the 2 percent trial rate in the offer they received. But when Jahir Escobar called about a payment, she was told the family had not qualified and was not enrolled in the program. The notice of the denial had been mailed, the lender said. The Escobars never received it.

While attending an employment workshop at the , Jahir Escobar discovered a mortgage counseling program offered through the county’s Housing Initiatives Partnership.

She paid $17 for a credit report, attended a two-hour workshop and was given an appointment with Carmen Castro, a counselor with the Housing Initiatives Partnership.

Castro worked with the family for the next two years on a loan modification.

The Escobars had been paying $2,400 a month on their original mortgage, plus $900 a month for the second mortgage, based on the trial offer of 2 percent interest on a five-year loan. Under the loan modification arranged by the county, the Escobar’s mortgage now is about $2,000 per month.

The Escobars will pay about $30,000 more for their mortgage than they would have under the original terms, Jahir Escobar said.

“So we are a little bit underwater,” she said.

In a similar home elsewhere, the Escobars would likely be paying $2,600 per month, she said.

“And we’re happy for that,” Jahir Escobar said. “Thank you to Carmen. She really was a good agent for us.”

The state has enacted several legal reform measures in recent years aimed at stemming the rising number of foreclosures.

Maryland also offers free housing counseling and legal assistance for people facing foreclosure, through the Maryland Homeowners Preserving Equity (MDHOPE) initiative. Alternatives include participation in Maryland's mediation program or negotiating with servicers on a loan modification, forbearance, deed-in-lieu or short sale.

More than 66,000 homeowners have received free counseling in the four years of the MDHOPE program.

Call the MDHOPE hotline at 877-462-7555 or visit the MDHOPE website at www.mdhope.org to connect with a housing counselor or pro bono attorney.

The process can be complicated, Nelson said.

“It doesn’t always happen overnight,” he said. “But the advantage of dealing with the counseling agents that we have with the county is that they will walk you through that process. You get over one hurdle and you go to the next and go to the next. But the end result frequently is a good result.”

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