Borrowers

During the heady days of the housing boom, unscrupulous mortgage brokers steered trusting borrowers into overpriced loans to earn bigger commissions. It was one of the reasons the housing market tanked, taking the economy with it. Now, several years later, new Federal Reserve rules are set to kick in to eliminate this practice by restricting how loan originators are compensated. The industry is resisting. The National Association of Mortgage Brokers sued the Federal Reserve Board this month in an attempt to prevent the new rules from taking effect April 1. The trade group predicts the restrictions would cause "immediate, devastating, and irrevocable harm" and ultimately lead to the industry's extinction.

Annapolis Mayor Joshua J. Cohen's proposed budget may require deep cuts to pass the City Council, with some members warning Tuesday that the 8 percent spending increase envisioned in the plan is untenable. The mayor's $86.2 million plan for next fiscal year also includes a variety of fee increases intended to shore up the city's depleted cash reserves. The council saw the proposal for the first time at Monday's meeting, and must approve a spending plan by June. "It's outrageously high," said Alderman Frederick M. Paone, the council's lone Republican.

In response to Jamie Smith Hopkins' article in the Dec. 20 edition of The Sun, I believe your headline, " State mortgage program lags on modifying loans," presents an inaccurate assessment of Maryland's foreclosure prevention efforts. The Maryland Department of Housing and Community Development has not been slow to make mortgage payments more affordable for homeowners. DHCD has gone above and beyond what commercial lenders and servicers do to help homeowners who have received a foreclosure notice on their Maryland Mortgage Program loans.

Despite nationally recognized efforts to help residents avoid foreclosure, the state of Maryland has been slow to make mortgage payments more affordable for the struggling homeowners whose loans it owns. Gov. Martin O'Malley and his administration have pressed national loan servicers in recent years to work with homeowners rather than foreclose. But it wasn't until four months ago that the state — which lends money to first-time homebuyers — designed a program to lower monthly mortgage payments to an amount that its borrowers in trouble could afford, The Baltimore Sun has learned.

The Baltimore County Council approved borrowing more than $19 million to help build the long-stalled Owings Mills Town Center project, a major step forward in revitalizing the struggling commercial zone. The measure passed on a 6-0 vote, with Republican T. Bryan McIntire abstaining. The project will house branches of the Community College of Baltimore County and public library. The library and two-year college, housed in an estimated 60,000-square-foot building, will become part of the larger project along the Interstate 795 and Reisterstown Road corridors.

When Roy Miller couldn't afford to pay cash for furniture for his new Belair-Edison home last year, he didn't have to resort to a credit card or some other pricey form of borrowing. Instead, the 50-year-old housing counselor took advantage of a pilot lending program that provided a low-interest $1,000 loan and even paid him for salting away a little money in a separate account. "It's a good program. It's helping people to borrow and save," says Miller, who has repaid his loan.

Fewer Maryland homeowners were behind on their mortgages or on the brink of foreclosure this spring, a welcome improvement but one that faces strong headwinds from an uncertain economy. Since the second quarter, when the number of troubled borrowers declined here and nationwide, a steady flow of dreary economic news has stoked fears of a double-dip recession. U.S. employers cut jobs in July, and Americans pulled back on home purchases in a big way — meaning that more homeowners could be holding on by their fingertips, facing a loss of income and less opportunity to find a buyer to avoid foreclosure.

Anne Arundel County Executive John R. Leopold has authorized an early disbursement of property tax revenue and other funds to the city of Annapolis, allowing the city to keep paying its bills. Despite passing a balanced budget this year, Annapolis has struggled to take in enough tax receipts and other revenue to meet expenses. The city obtained a $10 million credit line after Mayor Joshua J. Cohen warned the city was in danger of not being able to meet payroll and pay other debts.

Could student loans be the next financial crisis? College costs have risen faster than inflation, and more students are borrowing and taking out bigger loans just to keep up. Defaults are on the rise. "Something is going to have to give if costs keep going up and people keep stretching themselves," says Deanne Loonin, a staff attorney with National Consumer Law Center. "It's not sustainable for borrowers." For those whose student debt load has reached a crushing level, help is in the works.