Why does Prince George's County Have So Many Foreclosures? (Clinton: middle-class, hair salon)

[justtitans]

This morning I was an editorial in the Gazette and a couple of things that were stated alarmed me.

Gazette.Net: Tackling foreclosures in-house

Despite the many programs available, Prince George’s County accounted for 26.4 percent of all foreclosure filings statewide in the fourth quarter of 2011, an increase of 5.9 percent from the same time the previous year, according to the Maryland Department of Housing and Community Development.

Then I had an opportunity to read a piece about this issue.

Racial Gap In Homeownership Widens In U.S. Slump : NPR

Prince George's enjoys a degree of iconic status among blacks in Washington, and along the East Coast. It is by far the wealthiest majority-black county in the nation. Median household income peaked at $71,696 in 2008, according to the census. That makes Prince George's wealthier than roughly 90 percent of all counties in the United States.
"Seeing that rate of foreclosure in Prince George's does represent a problem for the whole nation," says Bill Sermons, research director at the Center for Responsible Lending. "It's one of the few counties in the country where it's become more affluent as it's become blacker. ... There were a lot of communities within that community that were very solid, middle-class communities."

Nevertheless, talking publicly about losing your home is so taboo in Prince George's that nonprofit groups say it affects how often people ask them for help.
Residents say black Americans tend to be more private — and here, more prideful. After all, they say, people moved to Prince George's to do better, not worse.

The county was also targeted heavily by subprime lenders — more so than any other county in Maryland, according to state housing data. More mortgage fraud cases have resulted in convictions here than in any other county in Maryland, according to the State's Attorney's Office for Prince George's County. A special mortgage fraud office was set up here several years ago because of concerns about the high number of subprime mortgages being pushed in the county.
One fraud scheme, which involved a black couple convincing people they could help them stay in their homes, only to run off with their money, was so egregious it entered local folklore. It is widely regarded as one of the biggest mortgage fraud scams in the region's history.

On a recent tour of his neighborhood of fancy townhouses that once fetched nearly $400,000, Barron couldn't pass a handful of houses at a time without pointing out a foreclosure. One is a unit within a stone's throw of his front door.
Barron says his neighborhood is made up mostly of people who've "made it" — doctors, accountants, well-paid government workers and the like.
But he and others admit that some residents here were trying too hard to keep up with the Joneses, buying more home than they could afford.
Several minutes away, in an even more upscale neighborhood of more established black families, he points out a golf course sprinkled with tall weeds. The golf course went into foreclosure last year.
"When you live in a golf course community and the golf course is in foreclosure, it's a huge problem," he says.

So what's the problem? There are a lot different reasons given for why Prince George's County has this issue. So is it all of them, is it people living beyond their means, is it poor decision making by uneducated buyers, is it predatory lending, is it the recession or is it something else? We are the only district in this region that has not yet seen a substantial recovery from the recession, do you think we will ever fully recover from the past few years?

[EdwardA]

Originally Posted by meatkins

This morning I was an editorial in the Gazette and a couple of things that were stated alarmed me.

Gazette.Net: Tackling foreclosures in-house

Then I had an opportunity to read a piece about this issue.

Racial Gap In Homeownership Widens In U.S. Slump : NPR

So what's the problem? There are a lot different reasons given for why Prince George's County has this issue. So is it all of them, is it people living beyond their means, is it poor decision making by uneducated buyers, is it predatory lending, is it the recession or is it something else? We are the only district in this region that has not yet seen a substantial recovery from the recession, do you think we will ever fully recover from the past few years?

Here's why:

But help was easier to give when the economy was booming and Ladson was bringing home $4,000 a month as a mechanic at Amtrak. Even an injury on the job turned into a blessing in disguise when she collected a $700,000 settlement that allowed her to build her dream home in Clinton and help her longtime partner start her own hair salon.

Her injury settlement enabled her to buy a home in the 1990s. But instead of paying off her mortgage, she participated in the boom in cheap loans in the years before the recession. In the black community in particular, fast and loose credit became widely available for purchases such as cars and homes, seemingly offering a pathway to the good life.
Besides, there were better things to do with the money, she thought at the time, such as investing in the overheated stock market and cruising to the Bahamas.

For some black women, economy and willingness to aid family strains finances - The Washington Post

[justtitans]

Originally Posted by EdwardA

Here's why:



For some black women, economy and willingness to aid family strains finances - The Washington Post

Unbelievable....

[EdwardA]

Originally Posted by meatkins

Unbelievable....

I wonder when the Post runs their human interest pieces do they ever sit back and wonder how it will play to their general readership? I mean a woman who blows through a 700K settlement isn't exactly a sympathetic figure when you want to highlight the effects of the recession.

[justtitans]

Originally Posted by EdwardA

I wonder when the Post runs their human interest pieces do they ever sit back and wonder how it will play to their general readership? I mean a woman who blows through a 700K settlement isn't exactly a sympathetic figure when you want to highlight the effects of the recession.

The Washington Post has become completely voided of any journalistic integrity. They painted a picture as if this woman is struggling because of her injuries, but they didn't spend a lot of time talking about some of the awful financial decisions she made. That is the type of thing that irritates me. $700k is a lot of money and especially for this area. Instead of taking care of her needs, she spent her money on frivolous things like vacations, a unnecessary 'dream home', a Lincoln Navigator and of course helping others. There is nothing wrong with helping others, but at some point you have to be wise enough to know that you can't help everyone all the time. Seems like her financial decisions caused her more problems than the economy as the article tried to portray.

[Moth]

Originally Posted by meatkins

The Washington Post has become completely voided of any journalistic integrity. They painted a picture as if this woman is struggling because of her injuries, but they didn't spend a lot of time talking about some of the awful financial decisions she made. That is the type of thing that irritates me. $700k is a lot of money and especially for this area. Instead of taking care of her needs, she spent her money on frivolous things like vacations, a unnecessary 'dream home', a Lincoln Navigator and of course helping others. There is nothing wrong with helping others, but at some point you have to be wise enough to know that you can't help everyone all the time. Seems like her financial decisions caused her more problems than the economy as the article tried to portray.

Analagous to Rock Stars, Pro Athletes, Lotto Winners, and many who received a windfall from an inheritance or similiar.

People think a huge chunk of money will buy them a dream lifestyle forever. What they do not realize is that you have to keep bringing in that huge number. So they burn through it and end up worse.

700K could have helped with a down payment, some retirement savings, and a rainy day account. In other words, it would not have bought endless leisure, but rather a good chunk of stability.

[joeclyde]

I moved to PG county 2 years ago. I believe that a lot of people are just living above their means. There are a lot of people owning Mercedes, BMWs, and Jags. That probably shouldn't be driving those cars and paying the high car note each month.

[bonnielisabeth]

I live in PG adjacent, and agree with joeclyde (and edward).

There just seems to be a lot of "styling and profiling". Of the places I have lived and visited, the DC area has the most "keeping up with the joneses" at all cost mentality. I always wondered why relatives who lived near DC were so concerned about status, brand names, and fancy cars; I just thought it was their personal malfunction until I moved here!

Combine the DC area peer pressure to "look" prosperous and stylish (and "not poor"), PLUS
the willingness to make bad financial decisions to appear/feel "rich" and helpful, PLUS
the pressure to live up to "the wealthiest majority-black county in the nation" moniker PLUS
predatory lenders, PLUS
the lowest median incomes in the DC metro area =
the greatest number of foreclosures.

[adelphi_sky]

Originally Posted by joeclyde

I moved to PG county 2 years ago. I believe that a lot of people are just living above their means. There are a lot of people owning Mercedes, BMWs, and Jags. That probably shouldn't be driving those cars and paying the high car note each month.

Don't be fooled. I can almost guarantee 75% of those cars are leased. And in some cases, leasing isn't all that bad. If you look at the BMW website, you can see leases for $349/month.

[adelphi_sky]

Originally Posted by Moth

Analagous to Rock Stars, Pro Athletes, Lotto Winners, and many who received a windfall from an inheritance or similiar.

People think a huge chunk of money will buy them a dream lifestyle forever. What they do not realize is that you have to keep bringing in that huge number. So they burn through it and end up worse.

700K could have helped with a down payment, some retirement savings, and a rainy day account. In other words, it would not have bought endless leisure, but rather a good chunk of stability.

Show me 700k and I'll show you no debt! Only then may I go on a cruise or two. :-)