ANOTHER GOVERNMENT PROGRAM 'FAILURE'?
Mediation has been touted as a key strategy to stop foreclosures, both in Maryland and nationwide. Maryland passed a law last July giving homeowners in foreclosure the right to mediation, if they ask for it. The Justice Department reported in a November study that there were 25 mediation programs in 14 states.
But if Maryland is any indication, the programs are not working. As of May 31, just 56 homeowners have gotten a modification of their loan. Borrowers complain that lenders are more interested in foreclosing than negotiating. One borrower was horrified to discover that the bank had sold her home during the mediation process.
Prince George’s is the nation’s wealthiest majority-black county. Like many majority-minority areas, Prince George’s has been devastated by the foreclosure crisis. Heavily targeted by subprime lenders in the boom years, the county is now staggering under the weight of abandoned homes and plummeting prices.
For Prince George’s, and for other communities of color around the country, a “lagging collapse” may be ahead, said Alan Mallach, a nationally known housing expert who has done extensive on-the-ground research into the foreclosure crisis.