Dealing with foreclosures

Most of the homes in Dundalk's historic "Ships" district date to the 1920s, when they provided housing for steel mill workers at Sparrows Point. A poster from that era hanging in a Dundalk office features a drawing of Uncle Sam assuring buyers that the homes were "scientifically and substantially built."

Until recently, the compact neighborhood of well-maintained stucco townhouses and duplexes off Dundalk Avenue was attracting new families and investors. But the national foreclosure crisis has hit those short, narrow streets hard, with at least eight vacant homes in various stages of foreclosure.


They are part of the nearly 40,000 foreclosures across Maryland in the past two years that have left neighborhoods coping with the blight of empty, poorly maintained and often vandalized houses that sorely need new owners. Now, local officials and community leaders say they hope that a new federally funded rescue plan will provide relief.

Maryland has received nearly $27 million - to be administered under the Neighborhood Conservation Initiative - to help communities attract qualified buyers to areas with high foreclosure rates. Baltimore County alone is asking for $4.4 million, and the County Council is expected to approve the grant application at its session today.


"There are far more foreclosed units here than we will ever be able to address," said Amy Menzer, executive director of the nonprofit Dundalk Renaissance Corp., located in historic Dundalk Village. "But this program gives people more opportunity to reinvest and turn these properties around."

The initiative "is a really good start in recovery for neighborhoods affected by foreclosure," said Carol Gilbert, assistant secretary of the Maryland Department of Housing and Community Development. "In foreclosure, it is not just the homeowner affected but the neighborhood as a whole."

In all, 21 jurisdictions requested about $64 million - more than twice the available funds - from the state program. The state is expected to award the money this spring, Gilbert said.

"Unfortunately, there is not enough money to defeat the whole problem, but this is a good start in what will be a national recovery," Gilbert said. "We know in Maryland there will be high demand for fairly affordable housing stock."

According to the Department of Housing and Community Development, Prince George's County and Baltimore City have the highest numbers of foreclosures in the state, followed by Montgomery and Baltimore counties. There are pockets of foreclosures in the Edgewood area of Harford County and northern parts of Anne Arundel County.

Baltimore County officials said they would add the $4.4 million to about $2.6 million received last year from another federal housing program to target areas severely hurt by the foreclosure crisis, including Dundalk, Middle River, Essex, Hillendale, Randallstown, Gwynn Oak and Owings Mills.

"We can spend this money quickly and efficiently, and get buyers into foreclosed properties in areas with the greatest need," said Mary L. Harvey, director of the Baltimore County Office of Community Conservation.

For Menzer, the program means more revitalization for Dundalk.


"This program will boost confidence at a time when our real estate market can really use a good dose of it," she said. "There is a lot of potential here, but the concentration of foreclosed homes is having its effect. Every other homeowner fears he is losing equity."

Regina Buker, director of Harbel Housing Partnership, a Northeast Baltimore nonprofit, said the renovation component will spur interest in homes damaged by weather, lapsed maintenance or vandalism.

"This program will really open doors for many people, particularly for first-time buyers who do not always have the means to pay for costly repairs," she said.

Each buyer could be eligible for up to $50,000 - depending on the scope of renovations - to pay for settlement costs, restoration work or to buy down the mortgage amount, Harvey said. The loan would be in the form of a second mortgage, the balance of which would be forgiven if the buyer lives in the home for about 15 years.

Requirements for buyers include good credit and a stated intention to live there. Eligibility is capped at about $78,000 annually for a two-income household and about $40,000 for a single wage earner. Housing counselors will help prospective buyers with home selection and renovation estimates.

"We want to make sure these buyers get loans they can afford and with the best interest rates," Harvey said.


She predicted no shortage of interested and qualified buyers.

"A lot of working people are qualifying for mortgages," Harvey said. "Mortgage rates are down, and there is good housing stock, all worthy of investment."

Once neighbors see new residents sprucing up foreclosed homes, they will be more likely to reinvest in their own, she said.

"This money will help all across the county and across the country," said County Council President Joseph Bartenfelder. "If we can put people in these abandoned homes, we will not only revitalize neighborhoods, but we will revitalize families, too."