Prince William tries to tackle foreclosure nightmare

Prince William County (Map, News) - Prince William County will introduce a plan next week to confront its huge foreclosure rate — the highest in Virginia — without spending any money.

The proposal relies on diverting at least $20 million of the county's investment pool as leverage to win hundreds of low-interest home loans for county employees.

The employees — including police officers, teachers and firefighters — could receive lower interest rates to move into some of the 7,000 vacant and foreclosed homes that have glutted the market.

“Left unattended, the foreclosure problem could easily deteriorate as neighborhoods are allowed to slip into decay,” Finance Director Christopher Martino will say in a presentation to the Board of Supervisors Tuesday.

The county typically has between $700 million and $1 billion invested in a broad variety of sources, including banks. Under the proposal, banks would pay the county a fixed interest rate that would be lower than the rate they would charge the employees for the loans.

The real estate boom priced hundreds of police officers, firefighters and teachers out of Prince William County, and county leaders hope the plan will bring them closer to where they work.

Martino predicts the process would include 500 to 1,000 homes, depending on the size of the mortgage. If the program is successful, the county could invest more than $20 million, he said.

County officials say they have many questions about the plan, including how many employees would be interested and would they move into the neighborhoods that were the hardest hit.

But supervisors from both parties applauded the plan as unconventional and worth consideration.

“I think it's a brilliant, out-of-the-box idea. It kills two birds with one stone,” said Chairman Corey Stewart, R-at large.

“If we are investing our money, we might as well invest it in our own people,” said Supervisor Frank Principi, D-Woodbridge. “The time is right to try this.”

The idea for a major intervention came to Martino when he listened to a radio advertisement calling investing in foreclosed homes the “biggest no-brainer of all time.”

“Why can't we do something? How can we have some impact here?” Martino asked.

dgenz@dcexaminer.com

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