Maryland needs to change its mortgage laws, improve outreach to vulnerable borrowers and create emergency funds for families in mortgage trouble if it is going to stem a rising foreclosure rate, a task force said yesterday.
The report by the Homeownership Preservation Task Force comes as Maryland's foreclosure rate shot up 370 percent from June 2006 to June 2007, moving the state from 40th in the nation to 15th for foreclosures.
"The foreclosure spike is a national phenomenon, and Maryland has not escaped the challenges," said Tom Perez, secretary of the Department of Labor, Licensing and Regulation, who co-chaired the task force.
RealtyTrac, a national foreclosure tracking company, estimates that there was one foreclosure for every 806 households in Maryland over the past year. While the state's rate grew 370 percent, the national rate was up 87 percent, RealtyTrac reported.
"Today, we're 15th," Perez said. "Our goal is to be 50th. We're moving in the wrong direction."
In June, Gov. Martin O'Malley established the task force and charged it with finding ways to curb the growing foreclosure problem. The task force report to the governor yesterday suggested stronger underwriting and lending standards, as well as more oversight for the mortgage industry.
It also called for better education to help homeowners avoid predatory lenders, and more access to better financial products for people purchasing or refinancing homes.
Perez said the immediate issue is homeowners on the verge of or facing foreclosure. One task force suggestion is the creation of a fund to provide case-by-case interventions to prevent foreclosure, allowing more stable monthly payments or time for a property sale to troubled owners.
Some of the recommendations to the governor will require changes in Maryland law "to rein in bad players and practices," according to the report. The report also recommends a regulatory change to increase the time between default and foreclosure to 90 days from 15 days.
"What you're not seeing in there perhaps are some specifics in terms of what it might cost to fund some of the programs" recommended in the report, said Jacqueline Lampell, spokeswoman for the Department of Housing and Community Development. "That's because we don't really even know what the full impact of foreclosure will be."
Foreclosures disproportionately result from subprime loans, those offered to borrowers who have less than optimal credit and have difficulty getting a traditional loan. Such loans tend to have higher interest rates and options such as adjustable and teaser rates, according to the report.
A Maryland Bankers Association survey showed that adjustable-rate mortgages in the state grew from 1.6 percent of the total mortgages in 2000 to 11.7 percent in 2007. (by Capital News Service)
Tuesday, December 18, 2007
Thursday, December 13, 2007
Ruling helps poor renters
Counties' order that landlords accept vouchers is upheld
Landlords in Howard and Montgomery counties cannot turn away low-income renters who pay for their housing with federal vouchers, Maryland's highest court ruled yesterday.
The unanimous ruling upholds fair-housing laws in those counties and, housing advocates say, provides momentum for a drive to pass a statewide law requiring landlords to accept rental vouchers. Such a law, advocates say, would make it easier for poor people to live in affluent communities with better jobs and better schools.
"It's appalling that we do not have this as a state law and that people can be denied housing" solely because they are paying with a voucher, said Montgomery County Executive Isiah Leggett. He said landlords who don't accept vouchers are "impacting quite severely the level of affordable housing that may be available to people."
The Housing Choice voucher program -- formerly called Section 8 -- requires recipients to pay a portion of their income, usually about a third, toward rent and covers the balance with money from the U.S. Department of Housing and Urban Development. The federal law does not require landlords to accept the vouchers.
But a dozen states, as well as Howard and Montgomery counties in Maryland, have passed laws requiring participation. When a garden apartment complex in Wheaton refused to accept a woman's voucher, Montgomery County's Human Rights Commission fined the owner $15,000 and awarded $5,000 in compensatory damages to the would-be tenant.
The landlord, Glenmont Hills Associates, appealed the decision. A Montgomery Circuit Court judge found for the landlord last year, saying its refusal to participate was based on a legitimate, nondiscriminatory desire "to avoid the administrative hassle of the program."
The Maryland Court of Appeals overturned that decision yesterday. An attorney for the landlord, Jay Holland, said he was "extremely disappointed" and that he and his client are considering petitioning the U.S. Supreme Court to hear the case. At issue is whether federal law, which makes the program voluntary, can be trumped by a state or local law requiring participation.
In its decision, the Court of Appeals quoted from the 1995 HUD regulations creating the program: "State and local governments can of course impose additional requirements."
But Holland said the practical effect of the ruling might be that landlords will set their rents so high that voucher recipients cannot afford them.
Glenmont participates in Montgomery County's rental assistance program and has its own program to provide apartments at discounted rates to low-income residents. But the apartment complex owners felt the additional rules that come with the federal vouchers were burdensome, Holland said.
Affordable-housing advocates say that reasoning is often a red herring.
"Landlords say they don't want the administrative burden, but in many cases they don't want poor people in the buildings, and sometimes it's a surrogate for racial discrimination as well," said Bob Bruskin, senior counsel at the Washington Lawyers Committee for Civil Rights and Urban Affairs, which filed a friend-of-the-court brief supporting Montgomery County in the lawsuit.
Others who supported the county said the requirement was critical to integration efforts, both in terms of race and socioeconomics. They said that to qualify for the vouchers, families must pass credit and criminal background checks.
"I don't think America really wants to be so snotty and segregated as to say, 'I don't want somebody who's working but doesn't make as much as I do to live in my neighborhood or have their children go to school with my children,'" said Shanna Smith, president and CEO of the National Fair Housing Alliance.
Montgomery County has about 5,400 rental vouchers in use, compared with 1,100 in Howard County and more than 11,000 in Baltimore City, which does not have the "source of income" law requiring participation. The law is critical in Montgomery County, officials said, because of the high cost of housing there.
"In this county in particular, where for years you've had a very hot housing market, it's important to make sure that [more] than high-income people have access to housing," said Montgomery County Attorney Leon Rodriguez.
He said the Court of Appeals ruling should put to rest any concerns that other jurisdictions or state lawmakers might have about the legality of local laws pre-empting the federal law. A statewide fair-housing law would make it easier for low-income people to find housing, advocates said.
"If such a law were mandated statewide, that there couldn't be 'source of income' discrimination, it would have a significant impact upon the ability of people with vouchers to find housing and would reduce the specter of homelessness" for the poor, said Gregory Countess, an attorney with the Legal Aid Bureau of Maryland, which focuses on housing issues.
Baltimore City's housing commissioner, Paul A. Graziano, has said that he supports a statewide fair-housing law. (By Stephen Kiehl | Baltimore Sun)
Landlords in Howard and Montgomery counties cannot turn away low-income renters who pay for their housing with federal vouchers, Maryland's highest court ruled yesterday.
The unanimous ruling upholds fair-housing laws in those counties and, housing advocates say, provides momentum for a drive to pass a statewide law requiring landlords to accept rental vouchers. Such a law, advocates say, would make it easier for poor people to live in affluent communities with better jobs and better schools.
"It's appalling that we do not have this as a state law and that people can be denied housing" solely because they are paying with a voucher, said Montgomery County Executive Isiah Leggett. He said landlords who don't accept vouchers are "impacting quite severely the level of affordable housing that may be available to people."
The Housing Choice voucher program -- formerly called Section 8 -- requires recipients to pay a portion of their income, usually about a third, toward rent and covers the balance with money from the U.S. Department of Housing and Urban Development. The federal law does not require landlords to accept the vouchers.
But a dozen states, as well as Howard and Montgomery counties in Maryland, have passed laws requiring participation. When a garden apartment complex in Wheaton refused to accept a woman's voucher, Montgomery County's Human Rights Commission fined the owner $15,000 and awarded $5,000 in compensatory damages to the would-be tenant.
The landlord, Glenmont Hills Associates, appealed the decision. A Montgomery Circuit Court judge found for the landlord last year, saying its refusal to participate was based on a legitimate, nondiscriminatory desire "to avoid the administrative hassle of the program."
The Maryland Court of Appeals overturned that decision yesterday. An attorney for the landlord, Jay Holland, said he was "extremely disappointed" and that he and his client are considering petitioning the U.S. Supreme Court to hear the case. At issue is whether federal law, which makes the program voluntary, can be trumped by a state or local law requiring participation.
In its decision, the Court of Appeals quoted from the 1995 HUD regulations creating the program: "State and local governments can of course impose additional requirements."
But Holland said the practical effect of the ruling might be that landlords will set their rents so high that voucher recipients cannot afford them.
Glenmont participates in Montgomery County's rental assistance program and has its own program to provide apartments at discounted rates to low-income residents. But the apartment complex owners felt the additional rules that come with the federal vouchers were burdensome, Holland said.
Affordable-housing advocates say that reasoning is often a red herring.
"Landlords say they don't want the administrative burden, but in many cases they don't want poor people in the buildings, and sometimes it's a surrogate for racial discrimination as well," said Bob Bruskin, senior counsel at the Washington Lawyers Committee for Civil Rights and Urban Affairs, which filed a friend-of-the-court brief supporting Montgomery County in the lawsuit.
Others who supported the county said the requirement was critical to integration efforts, both in terms of race and socioeconomics. They said that to qualify for the vouchers, families must pass credit and criminal background checks.
"I don't think America really wants to be so snotty and segregated as to say, 'I don't want somebody who's working but doesn't make as much as I do to live in my neighborhood or have their children go to school with my children,'" said Shanna Smith, president and CEO of the National Fair Housing Alliance.
Montgomery County has about 5,400 rental vouchers in use, compared with 1,100 in Howard County and more than 11,000 in Baltimore City, which does not have the "source of income" law requiring participation. The law is critical in Montgomery County, officials said, because of the high cost of housing there.
"In this county in particular, where for years you've had a very hot housing market, it's important to make sure that [more] than high-income people have access to housing," said Montgomery County Attorney Leon Rodriguez.
He said the Court of Appeals ruling should put to rest any concerns that other jurisdictions or state lawmakers might have about the legality of local laws pre-empting the federal law. A statewide fair-housing law would make it easier for low-income people to find housing, advocates said.
"If such a law were mandated statewide, that there couldn't be 'source of income' discrimination, it would have a significant impact upon the ability of people with vouchers to find housing and would reduce the specter of homelessness" for the poor, said Gregory Countess, an attorney with the Legal Aid Bureau of Maryland, which focuses on housing issues.
Baltimore City's housing commissioner, Paul A. Graziano, has said that he supports a statewide fair-housing law. (By Stephen Kiehl | Baltimore Sun)
Friday, December 7, 2007
Commercial real estate begins to cave
This Bloomberg story is a little breathless, but there can be no doubt now that the credit crunch has spread to commercial property. Will be interesting to see how this affects Baltimore.
The cost of derivatives protecting investors from defaults on the highest-rated bonds backed by properties more than doubled in the past month, according to Markit Group Ltd. Prices suggest traders anticipate defaults rising to the highest level since the Great Depression, according to analysts at RBS Greenwich Capital in Greenwich, Connecticut.
The seven-year rally in offices and retail properties ended in September when prices fell an average of 1.2 percent, according to Moody's Investors Service. More losses are likely because banks are holding $54 billion of commercial mortgages they can't sell, data compiled by New York-based Citigroup Inc. show.
Lenders are struggling to sell loans to investors after losses on debt backed by subprime mortgages to people with poor credit caused financial markets to seize up in July and August. Bonds with AAA ratings secured by properties ranging from the Sears Tower in Chicago to trailer parks in Delaware yield about 203 basis points more than similar maturity Treasuries, up from 92 basis points on Oct. 12, according to Morgan Stanley indexes. (Baltimore Sun)
The cost of derivatives protecting investors from defaults on the highest-rated bonds backed by properties more than doubled in the past month, according to Markit Group Ltd. Prices suggest traders anticipate defaults rising to the highest level since the Great Depression, according to analysts at RBS Greenwich Capital in Greenwich, Connecticut.
The seven-year rally in offices and retail properties ended in September when prices fell an average of 1.2 percent, according to Moody's Investors Service. More losses are likely because banks are holding $54 billion of commercial mortgages they can't sell, data compiled by New York-based Citigroup Inc. show.
Lenders are struggling to sell loans to investors after losses on debt backed by subprime mortgages to people with poor credit caused financial markets to seize up in July and August. Bonds with AAA ratings secured by properties ranging from the Sears Tower in Chicago to trailer parks in Delaware yield about 203 basis points more than similar maturity Treasuries, up from 92 basis points on Oct. 12, according to Morgan Stanley indexes. (Baltimore Sun)
Foreclosure victim seeks relief from Maryland Court of Appeals
Kwaku Atta Poku and his family lost their townhouse to foreclosure after he could not prove he had paid off a mortgage.
A lawyer for Kwaku Atta Poku, the Columbia cab owner from Ghana who lost his house to foreclosure although he had made every mortgage payment, tried yesterday to convince skeptical Maryland Court of Appeals judges that they can grant him a legal way to recoup his financial losses without undermining the state's real estate system.
Attorney Scott C. Borison said his task was to show the judges on the state's highest court that Atta Poku had been placed in a "Kafkaesque" situation through no fault of his own, and that they could open a way for him to pursue a negligence claim.
Under current law, he said, a foreclosure can go through in 15 days, although it could take 30 days to get a ruling to stop it. If the court decides in Atta Poku's favor, it could change the rules governing foreclosures in Maryland.
Kenneth MacFayden, the attorney arguing for Washington Mutual Inc., the mortgage firm that took Atta Poku's townhouse and resold it more than two years ago, suggested such a ruling would reverse a legal foreclosure and affect an owner's ability to sell a property with a foreclosure in its history.
"How will I ever be able to transfer title and get title insurance again?" MacFayden asked the judges.
"What do I do about the fact that the property was sold? What do I do?" Judge Alan M. Wilner asked Borison.
Borison later agreed that, "the sale has occurred. The house is gone. There's nothing to get back."
Borison said he was trying to allow Atta Poku a way to recoup his financial losses - a dim prospect if the foreclosure is judged legal.
"My claim is real simple. Mr. Atta Poku went to these people to refinance. He didn't take any money out of the transaction," Borison said, noting that Washington Mutual or its sister companies held the original mortgage and also did the refinancing.
"They were taking money from one pocket and putting it in another," he said.
No one representing Washington Mutual has accused Atta Poku of causing the foreclosure. Shane Winn, the company's spokesman, has said Washington Mutual never received the settlement check satisfying the first mortgage after the refinancing. Atta Poku could not prove they received it because several key documents, including the settlement check itself, were lost by financial institutions.
Judge Dale R. Cathell noted another difficult aspect of the case.
"You're asking us to do something we haven't done before," he told Borison.
Later Cathell said, "I don't mean to say there's not been a wrong done," he said. "How is it corrected? I just don't know how to do it. I can't for the life of me understand how do you ratify a sale, and not ratify a sale?"
Judge Irma S. Raker asked MacFayden: "How could Mr. Atta Poku have avoided all this once this train started moving?"
MacFayden said Atta Poku could have sought an injunction to stop the foreclosure, and filed lawsuits against the settlement company, its agent, and the bank involved. MacFayden said he suspects the money was embezzled. But Borison said Atta Poku didn't get a lawyer licensed to practice in Maryland until after the foreclosure and the sale - a period of a few weeks.
Atta Poku sat in the court's front row, watching as the opposing lawyers answered questions from the seven red-robed judges.
After the nearly one-hour hearing in Annapolis, he said he had expected to hear more about the human side of his predicament.
"I'm just hoping all these technicalities will be resolved," he said. "If the law keeps all these technicalities - then justice will be stampeded."
After the hearing, J. Preston Turner, a Towson lawyer also representing the mortgage company, approached Atta Poku and offered to discuss the possibility of a settlement. Borison said he's more likely to wait for the high court's decision. (By Larry Carson |Baltimore Sun)
A lawyer for Kwaku Atta Poku, the Columbia cab owner from Ghana who lost his house to foreclosure although he had made every mortgage payment, tried yesterday to convince skeptical Maryland Court of Appeals judges that they can grant him a legal way to recoup his financial losses without undermining the state's real estate system.
Attorney Scott C. Borison said his task was to show the judges on the state's highest court that Atta Poku had been placed in a "Kafkaesque" situation through no fault of his own, and that they could open a way for him to pursue a negligence claim.
Under current law, he said, a foreclosure can go through in 15 days, although it could take 30 days to get a ruling to stop it. If the court decides in Atta Poku's favor, it could change the rules governing foreclosures in Maryland.
Kenneth MacFayden, the attorney arguing for Washington Mutual Inc., the mortgage firm that took Atta Poku's townhouse and resold it more than two years ago, suggested such a ruling would reverse a legal foreclosure and affect an owner's ability to sell a property with a foreclosure in its history.
"How will I ever be able to transfer title and get title insurance again?" MacFayden asked the judges.
"What do I do about the fact that the property was sold? What do I do?" Judge Alan M. Wilner asked Borison.
Borison later agreed that, "the sale has occurred. The house is gone. There's nothing to get back."
Borison said he was trying to allow Atta Poku a way to recoup his financial losses - a dim prospect if the foreclosure is judged legal.
"My claim is real simple. Mr. Atta Poku went to these people to refinance. He didn't take any money out of the transaction," Borison said, noting that Washington Mutual or its sister companies held the original mortgage and also did the refinancing.
"They were taking money from one pocket and putting it in another," he said.
No one representing Washington Mutual has accused Atta Poku of causing the foreclosure. Shane Winn, the company's spokesman, has said Washington Mutual never received the settlement check satisfying the first mortgage after the refinancing. Atta Poku could not prove they received it because several key documents, including the settlement check itself, were lost by financial institutions.
Judge Dale R. Cathell noted another difficult aspect of the case.
"You're asking us to do something we haven't done before," he told Borison.
Later Cathell said, "I don't mean to say there's not been a wrong done," he said. "How is it corrected? I just don't know how to do it. I can't for the life of me understand how do you ratify a sale, and not ratify a sale?"
Judge Irma S. Raker asked MacFayden: "How could Mr. Atta Poku have avoided all this once this train started moving?"
MacFayden said Atta Poku could have sought an injunction to stop the foreclosure, and filed lawsuits against the settlement company, its agent, and the bank involved. MacFayden said he suspects the money was embezzled. But Borison said Atta Poku didn't get a lawyer licensed to practice in Maryland until after the foreclosure and the sale - a period of a few weeks.
Atta Poku sat in the court's front row, watching as the opposing lawyers answered questions from the seven red-robed judges.
After the nearly one-hour hearing in Annapolis, he said he had expected to hear more about the human side of his predicament.
"I'm just hoping all these technicalities will be resolved," he said. "If the law keeps all these technicalities - then justice will be stampeded."
After the hearing, J. Preston Turner, a Towson lawyer also representing the mortgage company, approached Atta Poku and offered to discuss the possibility of a settlement. Borison said he's more likely to wait for the high court's decision. (By Larry Carson |Baltimore Sun)
Friday, November 30, 2007
Home-buying program continues
Smart Keys is latest form of grant initiative to help employees live near where they work
A popular state home-buying assistance program that critics complained contributes to suburban sprawl has been renamed and retooled to encourage home shoppers to live closer to where they work.
Smart Keys for Employees is the latest name for the on-again, off-again purchasing assistance program offered in a variety of forms for much of the past 10 years by the Maryland Department of Housing and Community Development.
Unveiled with little fanfare in April, the program offers qualifying home buyers grants of up to $5,000 to help pay settlement costs, if their new residence is within 10 miles of their workplace, or in the same county or municipality.
"It's a good program, and it's working well," said William Ariano Jr., deputy director of community development in the state housing department.
Smart Keys replaced a similar program called Live Near Your Work Plus. Begun last year by the Ehrlich administration, that program drew fire from growth-management advocates because the state aid was available on any existing home within 25 miles of the buyer's workplace.
The Ehrlich administration version offered qualifying buyers grants worth up to 3 percent of their mortgage to help cover closing costs.
That aid proved popular even as the housing market began to slump last year, since the fees and taxes required to purchase a home in Maryland are among the highest in the country.
But growth-management advocates and legislators complained that the 25-mile commute allowed under the Ehrlich program undercut the spirit of the state's Smart Growth policy.
The state began offering aid to home buyers based on where they work a decade ago under Gov. Parris N. Glendening. That program, simply dubbed Live Near Your Work, was part of the Smart Growth policy that Glendening crafted to guide Maryland's development. Under it, nearly 1,000 buyers got grants of up to $3,000 when buying homes in neighborhoods targeted for revitalization.
Ehrlich administration officials defended their more expansive approach, arguing it was intended to help suburban and even rural buyers, and not just the Baltimore City residents, who got the lion's share of the aid under Glendening.
The O'Malley administration's approach reins in the distance a buyer may live from work, but remains more liberal than the original aid program. Ariano said the new program attempts to be faithful to the Smart Growth policy of encouraging more compact development while also being relatively simple to follow.
"How do you incentivize somebody who is working in Salisbury to live where they work?" Ariano asked, "Because it's difficult in some cases to find housing in the immediate area."
Still, the housing official acknowledged that some counties are so large that the allowed commute can exceed 10 miles.
"It can be appreciable," Ariano said, "certainly [for] somebody that works in Dundalk, if they're buying a house up in Maryland Line."
Smart Keys is actually an add-on to another state home-buying assistance program, called House Keys for Employees. That initiative offers to match grants of up to $5,000 that buyers of affordable housing may receive from participating employers.
To get the additional $5,000 grants under Smart Keys, the home being bought must be in a designated growth zone called a "priority funding area." For more information on that and other state housing assistance programs, go to www.morehouse 4less.com.
The Smart Keys program has helped buyers of 60 homes so far, three-fourths of them in Baltimore, according to state figures. Buyers of those homes received a total of $409,000 in state aid, including other loans and grants.
The latest iteration of the home-buying aid program drew a lukewarm reaction from an outspoken critic of the previous effort.
"It's not quite as direct as 'Live Near Your Work,'" said Dru Schmidt-Perkins, executive director of 1000 Friends of Maryland, a growth-management advocacy group. "I'm not entirely excited about that."
But Ariano defended the name change, while acknowledging that the O'Malley administration wanted to put its own stamp on the program
"Another reason, frankly was just marketing," he said.
"You can have the greatest thing in the world, but unless you have something with a little sizzle to it, it won't take off." (By Timothy B. Wheeler |Baltimore Sun)
A popular state home-buying assistance program that critics complained contributes to suburban sprawl has been renamed and retooled to encourage home shoppers to live closer to where they work.
Smart Keys for Employees is the latest name for the on-again, off-again purchasing assistance program offered in a variety of forms for much of the past 10 years by the Maryland Department of Housing and Community Development.
Unveiled with little fanfare in April, the program offers qualifying home buyers grants of up to $5,000 to help pay settlement costs, if their new residence is within 10 miles of their workplace, or in the same county or municipality.
"It's a good program, and it's working well," said William Ariano Jr., deputy director of community development in the state housing department.
Smart Keys replaced a similar program called Live Near Your Work Plus. Begun last year by the Ehrlich administration, that program drew fire from growth-management advocates because the state aid was available on any existing home within 25 miles of the buyer's workplace.
The Ehrlich administration version offered qualifying buyers grants worth up to 3 percent of their mortgage to help cover closing costs.
That aid proved popular even as the housing market began to slump last year, since the fees and taxes required to purchase a home in Maryland are among the highest in the country.
But growth-management advocates and legislators complained that the 25-mile commute allowed under the Ehrlich program undercut the spirit of the state's Smart Growth policy.
The state began offering aid to home buyers based on where they work a decade ago under Gov. Parris N. Glendening. That program, simply dubbed Live Near Your Work, was part of the Smart Growth policy that Glendening crafted to guide Maryland's development. Under it, nearly 1,000 buyers got grants of up to $3,000 when buying homes in neighborhoods targeted for revitalization.
Ehrlich administration officials defended their more expansive approach, arguing it was intended to help suburban and even rural buyers, and not just the Baltimore City residents, who got the lion's share of the aid under Glendening.
The O'Malley administration's approach reins in the distance a buyer may live from work, but remains more liberal than the original aid program. Ariano said the new program attempts to be faithful to the Smart Growth policy of encouraging more compact development while also being relatively simple to follow.
"How do you incentivize somebody who is working in Salisbury to live where they work?" Ariano asked, "Because it's difficult in some cases to find housing in the immediate area."
Still, the housing official acknowledged that some counties are so large that the allowed commute can exceed 10 miles.
"It can be appreciable," Ariano said, "certainly [for] somebody that works in Dundalk, if they're buying a house up in Maryland Line."
Smart Keys is actually an add-on to another state home-buying assistance program, called House Keys for Employees. That initiative offers to match grants of up to $5,000 that buyers of affordable housing may receive from participating employers.
To get the additional $5,000 grants under Smart Keys, the home being bought must be in a designated growth zone called a "priority funding area." For more information on that and other state housing assistance programs, go to www.morehouse 4less.com.
The Smart Keys program has helped buyers of 60 homes so far, three-fourths of them in Baltimore, according to state figures. Buyers of those homes received a total of $409,000 in state aid, including other loans and grants.
The latest iteration of the home-buying aid program drew a lukewarm reaction from an outspoken critic of the previous effort.
"It's not quite as direct as 'Live Near Your Work,'" said Dru Schmidt-Perkins, executive director of 1000 Friends of Maryland, a growth-management advocacy group. "I'm not entirely excited about that."
But Ariano defended the name change, while acknowledging that the O'Malley administration wanted to put its own stamp on the program
"Another reason, frankly was just marketing," he said.
"You can have the greatest thing in the world, but unless you have something with a little sizzle to it, it won't take off." (By Timothy B. Wheeler |Baltimore Sun)
Monday, November 26, 2007
Ripple effect is feared from foreclosures
Neighboring houses likely to lose billions
Foreclosures on subprime home loans made to borrowers toward the end of the housing bubble will erase billions of dollars in value from neighboring properties, according to a report released yesterday by a nonprofit group.
The Center for Responsible Lending used its findings to call for Congress to enact stronger protections for borrowers facing foreclosure - such as giving bankruptcy courts the authority to allow borrowers to continue making payments - and to take steps to prevent predatory lending practices.
The center's report estimates about a third of homes nationwide - or 44.5 million homes - will see property values drop by an average $5,000 two to three years after the foreclosures of loans originated in 2005 or 2006. It estimates the total loss at $223 billion, with the greatest impact in neighborhoods with high concentrations of minority residents, who tended to be steered into subprime loans in greater numbers.
The study ranked Maryland sixth worst in the nation, with some 1.43 million properties - more than half the state's total - expected to lose $8 billion in value. California was ranked No. 1.
The estimate for Maryland was much higher than that issued last month by the Joint Economic Committee of Congress.
The committee estimated the total loss of state property values at $2.7 billion, of which about $1.1 billion was the ripple effect on nearby homes. That report forecast subprime foreclosures from the middle of this year through the end of 2009.
The Center for Responsible Lending's study projects more than 329,000 homes will lose value because of their neighbors' subprime woes in an area that includes mostly Baltimore City, with some spillover of properties in Baltimore and Anne Arundel counties. In the metropolitan area's five surrounding counties, nearly 483,000 homes will lose value, the study said.
Maryland homes will lose an average $5,597 in value, it said, ranging from an average of $9,366 in Prince George's County to an average of just under $1,000 in Allegany.
"Subprime foreclosures continue to spread throughout the country like a disease epidemic, and the losses are affecting more and more families who've lost their homes, and these losses extend to the neighbors," said Martin Eakes, the center's chief executive officer during a conference call yesterday.
Eakes blamed lenders who pushed borrowers into subprime loans, generally given to people with weak credit who then pay higher fees or interest.
Joanna Smith-Ramani, co-chair of the Baltimore Homeownership Preservation Coalition, said the number of homes the center predicts will be negatively affected is "frightening." She fears that rising foreclosures might "paralyze" revitalization efforts in the city.
Jay Brinkman, a financial economist with the Mortgage Bankers Association, which represents prime and subprime lenders, said he found flaws in the report. Price declines typically lead to more foreclosures, not the other way around, he said.
"The idea of associating price declines with foreclosures is not a valid argument, the way they have done it here," said Jay Brinkman, a financial economist with bankers association. "The way they attempted to reach out and apply it over 44 million homes is not valid."
Richard P. Clinch, director of economic research at the University of Baltimore's Jacob France Institute, said rising foreclosures and falling property values both are consequences of the popping of the housing bubble, not cause and effect.
"As the bubble bursts, property values fall," Clinch said.
Thomas E. Perez, co-chair of the Maryland Homeownership Preservation Task Force, said he can't comment on the center's figures but agrees with the premise that the effects of foreclosure reach far beyond the people losing their homes.
"The impacts are so wide-ranging," said Perez, the state's secretary of labor, licensing and regulation. "The ripple's really what we talk about. That is why it's so critical to get a handle on it."
Phillip Robinson, executive director of Civil Justice Inc., which has a network of attorneys who help clients with foreclosures, said the study may be a wake-up call for homeowners who've never had a subprime loan and expect their homes will always rise in value. (By Lorraine Mirabella and Jamie Smith Hopkins | Baltimore Sun)
Foreclosures on subprime home loans made to borrowers toward the end of the housing bubble will erase billions of dollars in value from neighboring properties, according to a report released yesterday by a nonprofit group.
The Center for Responsible Lending used its findings to call for Congress to enact stronger protections for borrowers facing foreclosure - such as giving bankruptcy courts the authority to allow borrowers to continue making payments - and to take steps to prevent predatory lending practices.
The center's report estimates about a third of homes nationwide - or 44.5 million homes - will see property values drop by an average $5,000 two to three years after the foreclosures of loans originated in 2005 or 2006. It estimates the total loss at $223 billion, with the greatest impact in neighborhoods with high concentrations of minority residents, who tended to be steered into subprime loans in greater numbers.
The study ranked Maryland sixth worst in the nation, with some 1.43 million properties - more than half the state's total - expected to lose $8 billion in value. California was ranked No. 1.
The estimate for Maryland was much higher than that issued last month by the Joint Economic Committee of Congress.
The committee estimated the total loss of state property values at $2.7 billion, of which about $1.1 billion was the ripple effect on nearby homes. That report forecast subprime foreclosures from the middle of this year through the end of 2009.
The Center for Responsible Lending's study projects more than 329,000 homes will lose value because of their neighbors' subprime woes in an area that includes mostly Baltimore City, with some spillover of properties in Baltimore and Anne Arundel counties. In the metropolitan area's five surrounding counties, nearly 483,000 homes will lose value, the study said.
Maryland homes will lose an average $5,597 in value, it said, ranging from an average of $9,366 in Prince George's County to an average of just under $1,000 in Allegany.
"Subprime foreclosures continue to spread throughout the country like a disease epidemic, and the losses are affecting more and more families who've lost their homes, and these losses extend to the neighbors," said Martin Eakes, the center's chief executive officer during a conference call yesterday.
Eakes blamed lenders who pushed borrowers into subprime loans, generally given to people with weak credit who then pay higher fees or interest.
Joanna Smith-Ramani, co-chair of the Baltimore Homeownership Preservation Coalition, said the number of homes the center predicts will be negatively affected is "frightening." She fears that rising foreclosures might "paralyze" revitalization efforts in the city.
Jay Brinkman, a financial economist with the Mortgage Bankers Association, which represents prime and subprime lenders, said he found flaws in the report. Price declines typically lead to more foreclosures, not the other way around, he said.
"The idea of associating price declines with foreclosures is not a valid argument, the way they have done it here," said Jay Brinkman, a financial economist with bankers association. "The way they attempted to reach out and apply it over 44 million homes is not valid."
Richard P. Clinch, director of economic research at the University of Baltimore's Jacob France Institute, said rising foreclosures and falling property values both are consequences of the popping of the housing bubble, not cause and effect.
"As the bubble bursts, property values fall," Clinch said.
Thomas E. Perez, co-chair of the Maryland Homeownership Preservation Task Force, said he can't comment on the center's figures but agrees with the premise that the effects of foreclosure reach far beyond the people losing their homes.
"The impacts are so wide-ranging," said Perez, the state's secretary of labor, licensing and regulation. "The ripple's really what we talk about. That is why it's so critical to get a handle on it."
Phillip Robinson, executive director of Civil Justice Inc., which has a network of attorneys who help clients with foreclosures, said the study may be a wake-up call for homeowners who've never had a subprime loan and expect their homes will always rise in value. (By Lorraine Mirabella and Jamie Smith Hopkins | Baltimore Sun)
Tuesday, November 13, 2007
Title company investigated on foreclosures
Cornerstone Title and Escrow, located in the 8100 block of Sandy Spring Road, is being investigated by the Maryland attorney general's office for allegedly using illegal practices to attract customers facing foreclosure.
A complaint was filed Oct. 30 by Attorney General Douglas Gansler in the Baltimore City Circuit Court against Cornerstone, In the House Technologies (a debt relief company in Upper Marlboro) and four individuals.
According to the complaint, the companies and individuals falsely promised homeowners facing foreclosure they would help them keep their homes.
State officials allege that in many cases, the customers ended up losing their property and having their equity stripped by the foreclosure rescue companies.
"They were taking title of the homes, refinancing them and getting the equity out, and then charging the homeowners higher rents than their mortgage payments, so they couldn't save money to keep their homes," said Gansler spokeswoman Raquel Guillory.
Cornerstone Title and Escrow has offices in Laurel, Washington, D.C. and Baltimore. Not associated with the much larger, California-based Cornerstone Title, the Laurel company provides various property title and settlement closing services, according to its Web site.
Sean Adecula, owner of the Laurel office, declined to comment on the allegations. But his attorney, Robert Gittins said, "All Cornerstone did was provide settlement services to clients and has nothing to do with foreclosures. Cornerstone did not provide services to save homes from foreclosure."
Gittins added that he is still reviewing the complaint and has 30 days to respond.
(by Gwendolyn Glenn, LaurelLeader.com)
A complaint was filed Oct. 30 by Attorney General Douglas Gansler in the Baltimore City Circuit Court against Cornerstone, In the House Technologies (a debt relief company in Upper Marlboro) and four individuals.
According to the complaint, the companies and individuals falsely promised homeowners facing foreclosure they would help them keep their homes.
State officials allege that in many cases, the customers ended up losing their property and having their equity stripped by the foreclosure rescue companies.
"They were taking title of the homes, refinancing them and getting the equity out, and then charging the homeowners higher rents than their mortgage payments, so they couldn't save money to keep their homes," said Gansler spokeswoman Raquel Guillory.
Cornerstone Title and Escrow has offices in Laurel, Washington, D.C. and Baltimore. Not associated with the much larger, California-based Cornerstone Title, the Laurel company provides various property title and settlement closing services, according to its Web site.
Sean Adecula, owner of the Laurel office, declined to comment on the allegations. But his attorney, Robert Gittins said, "All Cornerstone did was provide settlement services to clients and has nothing to do with foreclosures. Cornerstone did not provide services to save homes from foreclosure."
Gittins added that he is still reviewing the complaint and has 30 days to respond.
(by Gwendolyn Glenn, LaurelLeader.com)
Tuesday, October 30, 2007
Next for O'Malley: halt 'loopholes'. Companies avoid millions in taxes, he says
Climbing to the roof of a downtown Baltimore restaurant with a view of the city's skyline and inner-city neighborhoods, Gov. Martin O'Malley vowed yesterday to close corporate "loopholes" that he said allow large companies to avoid paying millions of dollars in state and local taxes each year.
"Businesses that benefit from our state's services must be willing to invest in those services with their tax dollars, so that everyone is paying their fair share," O'Malley said.
The Democratic governor said the state should close a "glaring loophole" that allows large corporations to avoid real estate recordation and transfer taxes - a levy typically equal to 2 percent of sale prices.
O'Malley climbed a ladder from the upper story of Gardel's restaurant to the roof, where he pointed to the Alex. Brown office building, which was sold last year but, because of the loophole, was not subject to transfer taxes. Philadelphia-based Resource America Inc. sold the 30-story tower last year for $120 million and avoided paying $2.4 million in city and state transfer and recordation fees.
"You know what it paid in transfer tax?" O'Malley said. "Not a single dime. If one of these houses around us had sold for $200,000, that homeowner would have paid $4,000 in the local transfer taxes. ... That's not fair, and that's not right."
Yesterday's news conference was the third this week that the governor has held to roll out more details of his blueprint to close a projected $1.7 billion shortfall in the state general fund budget that begins July 1 next year.
O'Malley has outlined plans to make the state income tax more progressive, increase the sales tax rate from 5 percent to 6 percent and extend it to more services and to reduce the state property tax rate by 3 cents per $100 of assessed value over three years.
Business groups and Republican legislators rapped the governor's business tax proposals yesterday, saying that they would make Maryland less competitive in attracting and keeping jobs.
"It's totally irresponsible for the state to go off on these spending splurges and expect the public to accept it," said Senate Minority Leader David R. Brinkley, a Frederick County Republican.
Some corporations avoid paying transfer taxes by making their real estate part of a limited liability corporation. When the time comes to sell the building, they sell the LLC instead, thus avoiding the 0.5 percent levy that the state charges on property sales. Seventeen counties and Baltimore City levy a transfer tax on real property transactions, with the city and Baltimore County imposing a 1.5 percent tax.
The General Assembly has considered bills several times in recent years to close that loophole, but they have never succeeded.
House Speaker Michael E. Busch, an Anne Arundel County Democrat, has made prohibiting that practice a priority, but Senate President Thomas V. Mike Miller, a Southern Maryland Democrat, has not previously supported it.
However, Miller said recently that he would shepherd such a bill through his chamber if it were part of a budget-balancing package that includes legalized slot machine gambling.
Groups, including the Maryland Chamber of Commerce, Maryland State Builders Association, and Maryland Association of Realtors, have opposed bills closing the loophole.
"It would make Maryland commercial real property less attractive as a business investment, and the bill has been in 12 times since 1990 and defeated 12 times because it is not a good tax policy," said Ronald W. Wineholt, the in-house lobbyist for the Maryland Chamber of Commerce.
Closing the loophole would be worth about $14 million a year for the state, making it a relatively small part of O'Malley's efforts to balance the budget. Most of the money generated by the tax would go to local governments, about $50 million a year.
But the measure could be politically important for O'Malley for two reasons: Not only does it contribute to the governor's effort to pitch his fiscal package as a plan to make state taxes fairer, but it also could help ease the pain of local leaders who could see their finances hurt by the state's budget-balancing.
O'Malley has said that he hopes to avoid making cuts in state aid to local governments - money that helps support schools, public safety and other popular programs but that has often been subject to reductions in tough fiscal times. But Miller, Busch and others have said local governments will have to feel some of the pain. Giving local governments new revenue from the transfer tax could ease that burden.
Anne Arundel County Executive John R. Leopold, a Republican, said support for closing the corporate tax loopholes crosses party lines. He said closing the transfer tax loophole in particular would mean millions for Anne Arundel County that could prove crucial in its ability to maintain public services.
"My concern, of course, is that part of the budget-reduction package will ultimately include reductions in state aid to counties," Leopold said. "Any monies we can secure to counterbalance those cuts are welcome."
Loophole and tax law
Gov. Martin O'Malley called yesterday for closing corporate loopholes in his third event this week on his revenue-raising plan. Highlights include:
• Closing a "loophole" - referred to as "controlling interest" - that enables some corporations to avoid recordation and transfer taxes by making their real estate part of a limited liability company. When they sell the LLC, they can avoid the 0.5 percent levy that the state charges on property sales, and additional levies that 17 counties and Baltimore City charge. Because a deed never changes hands, the transfer tax is not triggered. The O'Malley administration says the change could bring the state an additional $14 million per year, with about $50 million flowing to local governments.
• Enacting a tax law - referred to as "combined reporting" - designed to prevent large companies operating in Maryland from hiding profits in other states. Wal-Mart and other large companies have used real estate investment trusts to shift profits to states with low or no corporate taxes. If Maryland approves "combined reporting," the state would receive an additional $25 million. (by James Drew, Baltimore Sun)
"Businesses that benefit from our state's services must be willing to invest in those services with their tax dollars, so that everyone is paying their fair share," O'Malley said.
The Democratic governor said the state should close a "glaring loophole" that allows large corporations to avoid real estate recordation and transfer taxes - a levy typically equal to 2 percent of sale prices.
O'Malley climbed a ladder from the upper story of Gardel's restaurant to the roof, where he pointed to the Alex. Brown office building, which was sold last year but, because of the loophole, was not subject to transfer taxes. Philadelphia-based Resource America Inc. sold the 30-story tower last year for $120 million and avoided paying $2.4 million in city and state transfer and recordation fees.
"You know what it paid in transfer tax?" O'Malley said. "Not a single dime. If one of these houses around us had sold for $200,000, that homeowner would have paid $4,000 in the local transfer taxes. ... That's not fair, and that's not right."
Yesterday's news conference was the third this week that the governor has held to roll out more details of his blueprint to close a projected $1.7 billion shortfall in the state general fund budget that begins July 1 next year.
O'Malley has outlined plans to make the state income tax more progressive, increase the sales tax rate from 5 percent to 6 percent and extend it to more services and to reduce the state property tax rate by 3 cents per $100 of assessed value over three years.
Business groups and Republican legislators rapped the governor's business tax proposals yesterday, saying that they would make Maryland less competitive in attracting and keeping jobs.
"It's totally irresponsible for the state to go off on these spending splurges and expect the public to accept it," said Senate Minority Leader David R. Brinkley, a Frederick County Republican.
Some corporations avoid paying transfer taxes by making their real estate part of a limited liability corporation. When the time comes to sell the building, they sell the LLC instead, thus avoiding the 0.5 percent levy that the state charges on property sales. Seventeen counties and Baltimore City levy a transfer tax on real property transactions, with the city and Baltimore County imposing a 1.5 percent tax.
The General Assembly has considered bills several times in recent years to close that loophole, but they have never succeeded.
House Speaker Michael E. Busch, an Anne Arundel County Democrat, has made prohibiting that practice a priority, but Senate President Thomas V. Mike Miller, a Southern Maryland Democrat, has not previously supported it.
However, Miller said recently that he would shepherd such a bill through his chamber if it were part of a budget-balancing package that includes legalized slot machine gambling.
Groups, including the Maryland Chamber of Commerce, Maryland State Builders Association, and Maryland Association of Realtors, have opposed bills closing the loophole.
"It would make Maryland commercial real property less attractive as a business investment, and the bill has been in 12 times since 1990 and defeated 12 times because it is not a good tax policy," said Ronald W. Wineholt, the in-house lobbyist for the Maryland Chamber of Commerce.
Closing the loophole would be worth about $14 million a year for the state, making it a relatively small part of O'Malley's efforts to balance the budget. Most of the money generated by the tax would go to local governments, about $50 million a year.
But the measure could be politically important for O'Malley for two reasons: Not only does it contribute to the governor's effort to pitch his fiscal package as a plan to make state taxes fairer, but it also could help ease the pain of local leaders who could see their finances hurt by the state's budget-balancing.
O'Malley has said that he hopes to avoid making cuts in state aid to local governments - money that helps support schools, public safety and other popular programs but that has often been subject to reductions in tough fiscal times. But Miller, Busch and others have said local governments will have to feel some of the pain. Giving local governments new revenue from the transfer tax could ease that burden.
Anne Arundel County Executive John R. Leopold, a Republican, said support for closing the corporate tax loopholes crosses party lines. He said closing the transfer tax loophole in particular would mean millions for Anne Arundel County that could prove crucial in its ability to maintain public services.
"My concern, of course, is that part of the budget-reduction package will ultimately include reductions in state aid to counties," Leopold said. "Any monies we can secure to counterbalance those cuts are welcome."
Loophole and tax law
Gov. Martin O'Malley called yesterday for closing corporate loopholes in his third event this week on his revenue-raising plan. Highlights include:
• Closing a "loophole" - referred to as "controlling interest" - that enables some corporations to avoid recordation and transfer taxes by making their real estate part of a limited liability company. When they sell the LLC, they can avoid the 0.5 percent levy that the state charges on property sales, and additional levies that 17 counties and Baltimore City charge. Because a deed never changes hands, the transfer tax is not triggered. The O'Malley administration says the change could bring the state an additional $14 million per year, with about $50 million flowing to local governments.
• Enacting a tax law - referred to as "combined reporting" - designed to prevent large companies operating in Maryland from hiding profits in other states. Wal-Mart and other large companies have used real estate investment trusts to shift profits to states with low or no corporate taxes. If Maryland approves "combined reporting," the state would receive an additional $25 million. (by James Drew, Baltimore Sun)
MD Officials Try To Slow Foreclosures
Maryland officials are trying to slow foreclosures. The Secretary of Licensing and Regulation suggested Tuesday that lawmakers could extend the period between a borrower's default and the legal start of foreclosure actions. That period is currently 15-days, a Governor's Task Force says it should be at least 90.
About 7000 residents lost their homes in this year's third quarter, compared to less than 1600 in the first quarter. (By Katherine Amenta, WMDT)
About 7000 residents lost their homes in this year's third quarter, compared to less than 1600 in the first quarter. (By Katherine Amenta, WMDT)
Friday, October 26, 2007
Increase in sales tax is a bad deal for renters
Gov. Martin O’Malley, as part of his budget proposal, recently proposed that Maryland sales and use taxes would increased to 6 percent and applied to property management services. That means renters in apartments who use property management services will pay that tax through higher rents.
Homeowners and condo owners should take note. Many homeowner associations and condo boards are managed by professional management companies, and will also pay a 6 percent tax on top of their management fees. Those taxes will ultimately be paid by the property owners in higher HOA and condo assessments. This tax is bad enough when considering its impact on renters, but it will hit homeowners too.
This proposal is inconsistent with the governor's pledge to help working families. Maryland should work to help housing affordability not make it worse.
Small business takes it on the chin from this tax too!
Any small business renting space from a building owner using a property management service will ultimately pay this tax as it is passed down to them though higher rents. The property management tax is a bad deal for small business as well as homeowners and renters.
(Terry Fox, gazette.net)
Homeowners and condo owners should take note. Many homeowner associations and condo boards are managed by professional management companies, and will also pay a 6 percent tax on top of their management fees. Those taxes will ultimately be paid by the property owners in higher HOA and condo assessments. This tax is bad enough when considering its impact on renters, but it will hit homeowners too.
This proposal is inconsistent with the governor's pledge to help working families. Maryland should work to help housing affordability not make it worse.
Small business takes it on the chin from this tax too!
Any small business renting space from a building owner using a property management service will ultimately pay this tax as it is passed down to them though higher rents. The property management tax is a bad deal for small business as well as homeowners and renters.
(Terry Fox, gazette.net)
Tuesday, October 16, 2007
Area home sales plunge 30% from September 2006
Baltimore-area housing sales fell last month to the lowest level for a September in at least nine years, as the turmoil in the mortgage industry hit the slumping market full force.
The number of homes sold - 1,975 - dropped nearly 30 percent from a year earlier, already well into the downturn, Metropolitan Regional Information Systems Inc. reported yesterday. It is the lowest sales figure for September since MRIS began tracking the area in 1998.
By comparison, buyers snapped up more than 4,000 homes in September 2005, the last hurrah of the housing boom.
Average home prices still eked out a gain last month, according to MRIS, which runs the local multiple-listing service. Prices in the metro area rose just under 2 percent, to about $315,000, with most jurisdictions seeing slight gains.
It took homes an average of 95 days to sell, a month longer than a year earlier. And the inventory of unsold homes, nearly 21,000, set a record.
Lender bankruptcies, a credit crunch and a jump in interest rates for jumbo mortgages in August continue to depress sales nationwide. Yesterday, the National Association of Realtors lowered its forecast of 2007 U.S. existing-home sales for the eighth month in a row. It now expects that the number of homes changing hands will be off about 11 percent from last year.
"I think the buyers are scared - they're afraid that if they buy today, that tomorrow [the price] is going to drop 15 percent," said George Brookhart, an agent with Long & Foster in Ellicott City.
Moody's Economy.com predicts that the local and national markets will not hit bottom until late next year, and its forecasts show values falling about 15 percent in the Baltimore area over those months. There are signs of backtracking now: Average prices dropped about 4 percent in Harford and Howard counties last month, the MRIS data showed.
Prices rose about 4 percent in Baltimore County, 3.6 percent in Anne Arundel, 2 percent in Carroll and half a percent in the city.
Economy.com says prices in the region would be down overall if they included the value of incentives that sellers now routinely give to buyers, such as thousands of dollars in closing-cost help.
High-priced Howard County was hardest hit last month, with the number of sales dropping by 34 percent. The average home there sold for about $418,000 - the point at which buyers would need a jumbo loan if they were financing the entire purchase. Harford, with an average price of $285,000, saw the smallest decline, but sales were down 22 percent.
Jada Krall, who is trying to sell a two-year-old colonial in Harford for $444,400, said she sees homes for sale everywhere she goes in the county. She counts 15 in her subdivision alone. To make hers stand out, she's offering a $7,500 incentive to be used toward closing costs or upgrade work.
"We've seen a few houses in the neighborhood sell," said Krall, whose family is relocating to Tampa, Fla. "We're just hoping ours is going to be next."
She can expect good deals in Florida, at least. Economy.com expects price declines of 20 percent to 30 percent in some of the once-hot housing markets there.
Celia Chen, director of housing economics at Economy.com, said recent tightening of credit is holding back demand nationally even as foreclosures increase supply. Borrowers with good credit can still get traditional mortgages, she said, but 40 percent of the loans issued last year were "subprime" and "nonprime" - from jumbo to interest-only.
"The lack of that kind of funding is going to have a big negative impact on housing this year," Chen said.
To avoid the higher rates of jumbo loans, city residents Bonita and Radames Rodriguez are opting for a regular mortgage plus an equity line of credit to purchase a $615,000 new home in Canton.
"I don't like the idea of having two separate loans, but it's better, much better, than the alternative," said Bonita Rodriguez.
The couple, who work in sales, will settle on that house this month and also complete the sale of the Bolton Hill rowhouse they've owned for eight years. They're selling it for $575,000, $74,000 less than the original asking price in April.
But they're buying their new home for $135,000 less than the builder's original price.
Bonita Rodriguez believes it was priced way too high to begin with. "I think we got a good deal, but I don't think we got a real bargain," she said.
Real estate agents say the days of setting prices based on past sales are over. Now, said Ron Howard with ReMax Sails in Baltimore, it's about the competition - other homes on the market.
After one of his Canton rehabs sat on the market for six months, Mel Stachura of Urban Rehab Consultants LLC decided to deal with the competition by adding a bathroom and more closet space.
"You have to adapt to survive," said Stachura, who was reacting to feedback from prospective buyers who looked and left. More than 60 came through. "There's buyers out there - they're just picky."
They're much more demanding from start to finish than they used to be, said Tressa Manna, his agent.
"Buyers are asking for everything on the home inspection, to the point of, 'I want the burnt-out bulb in the hallway replaced,'" said Manna, with ReMax Sails.(By Jamie Smith Hopkins, Baltimore Sun )
The number of homes sold - 1,975 - dropped nearly 30 percent from a year earlier, already well into the downturn, Metropolitan Regional Information Systems Inc. reported yesterday. It is the lowest sales figure for September since MRIS began tracking the area in 1998.
By comparison, buyers snapped up more than 4,000 homes in September 2005, the last hurrah of the housing boom.
Average home prices still eked out a gain last month, according to MRIS, which runs the local multiple-listing service. Prices in the metro area rose just under 2 percent, to about $315,000, with most jurisdictions seeing slight gains.
It took homes an average of 95 days to sell, a month longer than a year earlier. And the inventory of unsold homes, nearly 21,000, set a record.
Lender bankruptcies, a credit crunch and a jump in interest rates for jumbo mortgages in August continue to depress sales nationwide. Yesterday, the National Association of Realtors lowered its forecast of 2007 U.S. existing-home sales for the eighth month in a row. It now expects that the number of homes changing hands will be off about 11 percent from last year.
"I think the buyers are scared - they're afraid that if they buy today, that tomorrow [the price] is going to drop 15 percent," said George Brookhart, an agent with Long & Foster in Ellicott City.
Moody's Economy.com predicts that the local and national markets will not hit bottom until late next year, and its forecasts show values falling about 15 percent in the Baltimore area over those months. There are signs of backtracking now: Average prices dropped about 4 percent in Harford and Howard counties last month, the MRIS data showed.
Prices rose about 4 percent in Baltimore County, 3.6 percent in Anne Arundel, 2 percent in Carroll and half a percent in the city.
Economy.com says prices in the region would be down overall if they included the value of incentives that sellers now routinely give to buyers, such as thousands of dollars in closing-cost help.
High-priced Howard County was hardest hit last month, with the number of sales dropping by 34 percent. The average home there sold for about $418,000 - the point at which buyers would need a jumbo loan if they were financing the entire purchase. Harford, with an average price of $285,000, saw the smallest decline, but sales were down 22 percent.
Jada Krall, who is trying to sell a two-year-old colonial in Harford for $444,400, said she sees homes for sale everywhere she goes in the county. She counts 15 in her subdivision alone. To make hers stand out, she's offering a $7,500 incentive to be used toward closing costs or upgrade work.
"We've seen a few houses in the neighborhood sell," said Krall, whose family is relocating to Tampa, Fla. "We're just hoping ours is going to be next."
She can expect good deals in Florida, at least. Economy.com expects price declines of 20 percent to 30 percent in some of the once-hot housing markets there.
Celia Chen, director of housing economics at Economy.com, said recent tightening of credit is holding back demand nationally even as foreclosures increase supply. Borrowers with good credit can still get traditional mortgages, she said, but 40 percent of the loans issued last year were "subprime" and "nonprime" - from jumbo to interest-only.
"The lack of that kind of funding is going to have a big negative impact on housing this year," Chen said.
To avoid the higher rates of jumbo loans, city residents Bonita and Radames Rodriguez are opting for a regular mortgage plus an equity line of credit to purchase a $615,000 new home in Canton.
"I don't like the idea of having two separate loans, but it's better, much better, than the alternative," said Bonita Rodriguez.
The couple, who work in sales, will settle on that house this month and also complete the sale of the Bolton Hill rowhouse they've owned for eight years. They're selling it for $575,000, $74,000 less than the original asking price in April.
But they're buying their new home for $135,000 less than the builder's original price.
Bonita Rodriguez believes it was priced way too high to begin with. "I think we got a good deal, but I don't think we got a real bargain," she said.
Real estate agents say the days of setting prices based on past sales are over. Now, said Ron Howard with ReMax Sails in Baltimore, it's about the competition - other homes on the market.
After one of his Canton rehabs sat on the market for six months, Mel Stachura of Urban Rehab Consultants LLC decided to deal with the competition by adding a bathroom and more closet space.
"You have to adapt to survive," said Stachura, who was reacting to feedback from prospective buyers who looked and left. More than 60 came through. "There's buyers out there - they're just picky."
They're much more demanding from start to finish than they used to be, said Tressa Manna, his agent.
"Buyers are asking for everything on the home inspection, to the point of, 'I want the burnt-out bulb in the hallway replaced,'" said Manna, with ReMax Sails.(By Jamie Smith Hopkins, Baltimore Sun )
Wednesday, October 10, 2007
Abell Foundation criticizes Baltimore Housing authority
The city's housing authority has abandoned its mission to house the poor, according to a new report by the Abell Foundation.
The report criticizes city housing officials for focusing on demolition of properties instead of providing new housing.
"On its seventieth anniversary, the Housing Authority - once on a mission to replace slums with safe homes for Baltimore's poor - is now in the demolition business," wrote Joan Jacobson, author of the Abell report,
The number of occupied public housing units in the city has declined by 42 percent in the past 15 years - from more than 16,000 to less than 10,000, according to the report, which says the authority's plans for new housing are "unclear."
City housing officials have also faced criticism for plans to use a $59 million affordable housing fund, created to provide homes for the poor and working class, to instead demolish units at 15 sites.
The Housing Authority of Baltimore City issued a response that called the report "deeply flawed and biased."
The authority said the report does not take into sufficient account federal funding cuts in the past six years, in which $79 million was cut from the authority's budget, or court orders that have made it harder to build new public housing.
Housing Commissioner Paul T. Graziano said the housing authority plans 3,700 housing units in mixed-income developments and demolition is needed to eliminate blight and make way for new housing.
"I think there is a failure to recognize that in order to create the viable mixed-income communities that our residents deserve, we need to tear down some of the old," Graziano said.
"These are not places where I feel good about the young children of the city growing up." (The Associated Press, examiner.com)
The report criticizes city housing officials for focusing on demolition of properties instead of providing new housing.
"On its seventieth anniversary, the Housing Authority - once on a mission to replace slums with safe homes for Baltimore's poor - is now in the demolition business," wrote Joan Jacobson, author of the Abell report,
The number of occupied public housing units in the city has declined by 42 percent in the past 15 years - from more than 16,000 to less than 10,000, according to the report, which says the authority's plans for new housing are "unclear."
City housing officials have also faced criticism for plans to use a $59 million affordable housing fund, created to provide homes for the poor and working class, to instead demolish units at 15 sites.
The Housing Authority of Baltimore City issued a response that called the report "deeply flawed and biased."
The authority said the report does not take into sufficient account federal funding cuts in the past six years, in which $79 million was cut from the authority's budget, or court orders that have made it harder to build new public housing.
Housing Commissioner Paul T. Graziano said the housing authority plans 3,700 housing units in mixed-income developments and demolition is needed to eliminate blight and make way for new housing.
"I think there is a failure to recognize that in order to create the viable mixed-income communities that our residents deserve, we need to tear down some of the old," Graziano said.
"These are not places where I feel good about the young children of the city growing up." (The Associated Press, examiner.com)
Monday, October 8, 2007
Retaliatory evictions are next issue for Baltimore City housing advocates
Retaliatory evictions are next issue for Baltimore City housing advocates
Unsightly piles of tenants’ furniture dumped on city sidewalks and lack of formal notice for evictions should be a thing of the past in Baltimore City, thanks to a new law just signed by Mayor Sheila Dixon.
But housing advocates said the law is just the first step toward a long-term effort to improve tenants rights.
“The next issue we want to tackle is landlord retaliation,” said John Netherecut, executive director of the Public Justice Center, a housing advocacy group. “We have some of the most lax laws in the country.”
Netherecut, whose organization joined dozen of tenants rights groups to muster support for the new law, said strengthening the laws preventing landlords from evicting tenants who complain or call a housing inspector is next.
“In most states, once the tenant alleges retaliation, that becomes part of a defense in an eviction case,” Netherecut said.
“Then the judge hears the facts from both sides,” he said.
But Kathy Howard, a lobbyist for the Maryland Multi-Housing Association, said any changes to the laws would add confusion to the eviction process.
“When you’re talking about whether or not someone is doing something for a retaliatory motive, that gets into what a landlord is thinking — which can be very muddy,” she said.
“The issue is whether or not the rent has been paid.”
Dixon signed the “chattel” bill into law Monday. The law requires landlords to take an evicted tenant’s belongings to a dump. The law also ensures tenants receive 14 days’ notice prior to an eviction.
The measure will improve the image of Baltimore, City Council President Stephanie-Rawlings-Blake said at a news conference Monday. “Children should be able to play outside without running into a living room set.”
Outgoing Councilman Kenneth Harris, D-4th District, who introduced the chattel bill, said: “I don’t know if there is anyone on the council who has the agenda like I did to make sure renters are treated fairly.” (by Stephen Janis, The Examiner)
Unsightly piles of tenants’ furniture dumped on city sidewalks and lack of formal notice for evictions should be a thing of the past in Baltimore City, thanks to a new law just signed by Mayor Sheila Dixon.
But housing advocates said the law is just the first step toward a long-term effort to improve tenants rights.
“The next issue we want to tackle is landlord retaliation,” said John Netherecut, executive director of the Public Justice Center, a housing advocacy group. “We have some of the most lax laws in the country.”
Netherecut, whose organization joined dozen of tenants rights groups to muster support for the new law, said strengthening the laws preventing landlords from evicting tenants who complain or call a housing inspector is next.
“In most states, once the tenant alleges retaliation, that becomes part of a defense in an eviction case,” Netherecut said.
“Then the judge hears the facts from both sides,” he said.
But Kathy Howard, a lobbyist for the Maryland Multi-Housing Association, said any changes to the laws would add confusion to the eviction process.
“When you’re talking about whether or not someone is doing something for a retaliatory motive, that gets into what a landlord is thinking — which can be very muddy,” she said.
“The issue is whether or not the rent has been paid.”
Dixon signed the “chattel” bill into law Monday. The law requires landlords to take an evicted tenant’s belongings to a dump. The law also ensures tenants receive 14 days’ notice prior to an eviction.
The measure will improve the image of Baltimore, City Council President Stephanie-Rawlings-Blake said at a news conference Monday. “Children should be able to play outside without running into a living room set.”
Outgoing Councilman Kenneth Harris, D-4th District, who introduced the chattel bill, said: “I don’t know if there is anyone on the council who has the agenda like I did to make sure renters are treated fairly.” (by Stephen Janis, The Examiner)
Tuesday, October 2, 2007
Washington Mutual Announces New Standards for Brokers
Oct. 1 (Bloomberg) -- Washington Mutual Inc., the largest U.S. savings and loan, is requiring that mortgage brokers show they disclosed lending terms to borrowers as a record number of Americans face losing their homes to foreclosure.
Brokers who do business with Washington Mutual must provide evidence that they revealed their compensation and explained terms of the loan they recommended including amounts, prepayment penalties, and whether interest rates or payments may change, the Seattle-based lender said in a statement today. Washington Mutual also said it would try to call every borrower represented by a broker to review the terms of a loan before closing.
Mortgage brokers have been criticized in Congress and by consumer advocates who say insufficient disclosure, deceptive lending practices and lax regulation helped raise foreclosures on U.S. homes to a record high in August. Rising interest rates squeezed homebuyers with poor credit histories prompting the worst housing slump in 16 years.
``This is a step in the right direction and it's very important this is done to avert future problems,'' said Allen Fishbein, director of housing and credit policy at the Consumer Federation of America, a Washington-based advocacy group. ``Lenders in general need to play more of an oversight role if they use brokers.''
Washington Mutual rose 38 cents, or 1 percent, to $35.69 at 4:01 p.m. in New York Stock Exchange composite trading. The stock has dropped 21 percent this year.
Proposed Legislation
About 59 percent of all mortgages last year were arranged through brokers, according to Columbia, Maryland-based Wholesale Access Mortgage Research & Consulting Inc.
``These efforts are about further simplifying the process of obtaining a home loan for our customers and helping to ensure that our customers fully understand the various choices available to them,'' Alan Gulick, a Washington Mutual spokesman, said in an e-mailed statement. The changes go into effect Oct. 9, he said.
U.S. House Financial Services Committee Chairman Barney Frank said that he's writing legislation to halt predatory mortgage lending and increase consumer protection.
Frank, a Massachusetts Democrat, circulated an outline of a plan last week that would require mortgage brokers to be licensed and registered under state or federal law. He may also propose eliminating incentive pay to brokers based on a customers' choice of mortgage terms.
Brokers serve as middlemen while lenders are responsible for reviewing applications as well as making approval and funding decisions that lead to bad mortgages, George Hanzimanolis, president of the National Association of Mortgage Brokers, said in an interview last month.
`Already Required'
``Brokers are already required to do this,'' Hanzimanolis said today in commenting on disclosures to borrowers. ``The government requires us to do it. Maybe they are just trying to reiterate what the rules are.''
U.S. Representative Spencer Bachus of Alabama, the top Republican on the House Financial Services Committee, introduced legislation July 12 to create a national registration system and a new licensing standard for brokers. Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat seeking his party's presidential nomination, unveiled legislation Sept. 5 that would bar brokers from steering borrowers into costly loans.
``Any lender that is buying loans from anyone has quality control, has full underwriting capabilities,'' Hanzimanolis said today. ``If there are loans that are bad, those are things they should be identifying up front.''
Brokers who do business with Washington Mutual must provide evidence that they revealed their compensation and explained terms of the loan they recommended including amounts, prepayment penalties, and whether interest rates or payments may change, the Seattle-based lender said in a statement today. Washington Mutual also said it would try to call every borrower represented by a broker to review the terms of a loan before closing.
Mortgage brokers have been criticized in Congress and by consumer advocates who say insufficient disclosure, deceptive lending practices and lax regulation helped raise foreclosures on U.S. homes to a record high in August. Rising interest rates squeezed homebuyers with poor credit histories prompting the worst housing slump in 16 years.
``This is a step in the right direction and it's very important this is done to avert future problems,'' said Allen Fishbein, director of housing and credit policy at the Consumer Federation of America, a Washington-based advocacy group. ``Lenders in general need to play more of an oversight role if they use brokers.''
Washington Mutual rose 38 cents, or 1 percent, to $35.69 at 4:01 p.m. in New York Stock Exchange composite trading. The stock has dropped 21 percent this year.
Proposed Legislation
About 59 percent of all mortgages last year were arranged through brokers, according to Columbia, Maryland-based Wholesale Access Mortgage Research & Consulting Inc.
``These efforts are about further simplifying the process of obtaining a home loan for our customers and helping to ensure that our customers fully understand the various choices available to them,'' Alan Gulick, a Washington Mutual spokesman, said in an e-mailed statement. The changes go into effect Oct. 9, he said.
U.S. House Financial Services Committee Chairman Barney Frank said that he's writing legislation to halt predatory mortgage lending and increase consumer protection.
Frank, a Massachusetts Democrat, circulated an outline of a plan last week that would require mortgage brokers to be licensed and registered under state or federal law. He may also propose eliminating incentive pay to brokers based on a customers' choice of mortgage terms.
Brokers serve as middlemen while lenders are responsible for reviewing applications as well as making approval and funding decisions that lead to bad mortgages, George Hanzimanolis, president of the National Association of Mortgage Brokers, said in an interview last month.
`Already Required'
``Brokers are already required to do this,'' Hanzimanolis said today in commenting on disclosures to borrowers. ``The government requires us to do it. Maybe they are just trying to reiterate what the rules are.''
U.S. Representative Spencer Bachus of Alabama, the top Republican on the House Financial Services Committee, introduced legislation July 12 to create a national registration system and a new licensing standard for brokers. Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat seeking his party's presidential nomination, unveiled legislation Sept. 5 that would bar brokers from steering borrowers into costly loans.
``Any lender that is buying loans from anyone has quality control, has full underwriting capabilities,'' Hanzimanolis said today. ``If there are loans that are bad, those are things they should be identifying up front.''
Monday, October 1, 2007
Report criticizes Housing Authority for demolishing public housing
The number of occupied public housing units in Baltimore has dropped 42 percent over the past 15 years — from 16,525 to 9,625 — as the Housing Authority of Baltimore City “is now in the demolition business,” according to a report from The Abell Foundation.
“With virtually no plans to replace the deteriorated units being razed or sold, tenant representatives and housing advocates have watched with growing alarm as they wonder if the Housing Authority has abandoned its mission to house the poor,” wrote Joan Jacobson, author of the recent report, “The Dismantling of Baltimore’s Public Housing.”
While more than a quarter of Baltimore families live in poverty, the Housing Authority is removing or demolishing 2,400 homes from its inventory, according to the report.
The report further states the Housing Authority is planning to spend almost twice as much on demolition, $24 million, as it will spend on redevelopment, $14 million, in 2007 and 2008.
People who read this also read:
“Today’s demolition plans offer no sense of hope for Baltimore’s neediest,” Jacobson wrote.
In a lengthy response, the Housing Authority said the report failed to recognize the funding crisis and complex challenges that affect every public housing authority in the nation.
The Housing Authority plans to lease 2,500 new Section 8 units in the next year. The Housing Authority reported funding for public housing decreased 33 percent from 1999 to 2006.
While the number of public housing units has decreased over the years, the Housing Authority has said it has increased its Section 8 vouchers to make up for the loss of units, as reported in The Examiner’s “Housing Matters” series, Sept. 17 and 18.
“The Jacobson report is filled with inaccuracies, distorts the historical record and offers no useful recommendations to respond to the crisis caused by the steady erosion of federal support for public and other types of affordable housing,” the Housing Authority said.
The Abell Foundation is a Baltimore nonprofit dedicated to improving the quality of life in the city.
Recommendations
» The state should pass a fair-housing law that requires landlords to accept Section 8 vouchers, similar to laws in Howard and Montgomery counties.
» A “one-for-one” replacement policy for demolished units should be adopted.
» Developers, city officials and housing experts should study city public housing. (by Andrew Cannarsa, examiner.com)
“With virtually no plans to replace the deteriorated units being razed or sold, tenant representatives and housing advocates have watched with growing alarm as they wonder if the Housing Authority has abandoned its mission to house the poor,” wrote Joan Jacobson, author of the recent report, “The Dismantling of Baltimore’s Public Housing.”
While more than a quarter of Baltimore families live in poverty, the Housing Authority is removing or demolishing 2,400 homes from its inventory, according to the report.
The report further states the Housing Authority is planning to spend almost twice as much on demolition, $24 million, as it will spend on redevelopment, $14 million, in 2007 and 2008.
People who read this also read:
“Today’s demolition plans offer no sense of hope for Baltimore’s neediest,” Jacobson wrote.
In a lengthy response, the Housing Authority said the report failed to recognize the funding crisis and complex challenges that affect every public housing authority in the nation.
The Housing Authority plans to lease 2,500 new Section 8 units in the next year. The Housing Authority reported funding for public housing decreased 33 percent from 1999 to 2006.
While the number of public housing units has decreased over the years, the Housing Authority has said it has increased its Section 8 vouchers to make up for the loss of units, as reported in The Examiner’s “Housing Matters” series, Sept. 17 and 18.
“The Jacobson report is filled with inaccuracies, distorts the historical record and offers no useful recommendations to respond to the crisis caused by the steady erosion of federal support for public and other types of affordable housing,” the Housing Authority said.
The Abell Foundation is a Baltimore nonprofit dedicated to improving the quality of life in the city.
Recommendations
» The state should pass a fair-housing law that requires landlords to accept Section 8 vouchers, similar to laws in Howard and Montgomery counties.
» A “one-for-one” replacement policy for demolished units should be adopted.
» Developers, city officials and housing experts should study city public housing. (by Andrew Cannarsa, examiner.com)
Foreclosure Fraud
The D.C. Council contemplates a law to prevent it.
WHEN JOY JENISE Jackson and her bridegroom, Kurt Fordham, walked down the aisle together at the Mayflower Hotel last year, they did it in style. The happy couple joined their 360 guests for lobster and four wedding cakes, then bestowed gifts on their attendants that included a house and a Porsche. The newlyweds were also business partners, in the Lanham-based Metropolitan Money Store, a "foreclosure rescue" service that advertised itself as a savior to families in danger of losing their homes.
How romantic. Alas, Metropolitan Money Store was a scam to bilk hundreds of financially troubled homeowners out of the equity in their homes -- allegedly to the tune of $60 million, according to a class-action lawsuit filed in U.S. District Court in Maryland. The company allegedly pitched its services to minorities via radio advertising, then siphoned off their wealth through "straw buyers" who would acquire title to their homes. The Secret Service and FBI are conducting investigations.
Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.
Metropolitan Money Store is only the latest alleged version of an old scam that preys on people -- often elderly or minority -- who find themselves in this difficult family crisis. Foreclosure happens fast; as the bank letters begin arriving, people panic. Certainly the risk is not confined to Maryland, which had enacted legislation designed to combat foreclosure-rescue abuses in 2005. The District's attorney general has filed suit on behalf of at least 27 District residents who were allegedly victimized by the Metropolitan Money Store.
The D.C. Council is considering a bill to prohibit foreclosure consultant rip-offs in the District. Shepherded by Mary M. Cheh (D-Ward 3), the legislation, which is likely to pass, would outlaw the kind of promise that the Metropolitan Money Store allegedly made and allegedly broke: Hand over the title to your house in return for a bailout. The bill also declares that anyone who engages in the foreclosure rescue business is legally bound to act in the homeowner's best financial interest. No doubt the next generation of con artists will try to find a way around these strictures. But with the housing market headed for what could be extended difficulty, the District's homeowners need protection against fraud, and this bill is a good start toward giving it to them. (www.washingtonpost.com)
WHEN JOY JENISE Jackson and her bridegroom, Kurt Fordham, walked down the aisle together at the Mayflower Hotel last year, they did it in style. The happy couple joined their 360 guests for lobster and four wedding cakes, then bestowed gifts on their attendants that included a house and a Porsche. The newlyweds were also business partners, in the Lanham-based Metropolitan Money Store, a "foreclosure rescue" service that advertised itself as a savior to families in danger of losing their homes.
How romantic. Alas, Metropolitan Money Store was a scam to bilk hundreds of financially troubled homeowners out of the equity in their homes -- allegedly to the tune of $60 million, according to a class-action lawsuit filed in U.S. District Court in Maryland. The company allegedly pitched its services to minorities via radio advertising, then siphoned off their wealth through "straw buyers" who would acquire title to their homes. The Secret Service and FBI are conducting investigations.
Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.
Metropolitan Money Store is only the latest alleged version of an old scam that preys on people -- often elderly or minority -- who find themselves in this difficult family crisis. Foreclosure happens fast; as the bank letters begin arriving, people panic. Certainly the risk is not confined to Maryland, which had enacted legislation designed to combat foreclosure-rescue abuses in 2005. The District's attorney general has filed suit on behalf of at least 27 District residents who were allegedly victimized by the Metropolitan Money Store.
The D.C. Council is considering a bill to prohibit foreclosure consultant rip-offs in the District. Shepherded by Mary M. Cheh (D-Ward 3), the legislation, which is likely to pass, would outlaw the kind of promise that the Metropolitan Money Store allegedly made and allegedly broke: Hand over the title to your house in return for a bailout. The bill also declares that anyone who engages in the foreclosure rescue business is legally bound to act in the homeowner's best financial interest. No doubt the next generation of con artists will try to find a way around these strictures. But with the housing market headed for what could be extended difficulty, the District's homeowners need protection against fraud, and this bill is a good start toward giving it to them. (www.washingtonpost.com)
Wednesday, September 19, 2007
Group to offer weekly workshops on foreclosures
Sessions planned as county leads state in foreclosures
A new group of lenders, government officials and community advocates in Prince George’s County plans to kick off a set of weekly workshops Sept. 13 in Hyattsville to counsel residents on foreclosures and help stem a problem that is worse in the county than anywhere in Maryland.
Prince George’s County recorded more foreclosures in the first seven months of this year than any other Maryland county. The 2,800 foreclosures were more than triple the number during the same period last year, according to data company RealtyTrac. The increase accompanied a statewide and nationwide surge in foreclosures.
‘‘There are so many people being foreclosed on that the counselors can’t see them,” said Mosi Harrington, a member of the Prince George’s County Coalition for Homeownership Preservation.
The homeownership coalition, which includes the Prince George’s Housing Department, was formed this spring to educate residents on how to negotiate with lenders before they lose their homes, Harrington said. She said many residents never even try to negotiate.
Through its new program, the coalition will sponsor a two-hour workshop hosted by a different nonprofit counseling organization every week through November. The set of meetings starts at 7 p.m. today at the Hyattsville Municipal Building located at 4310 Gallatin St. Residents should call 301-883-5570 to reserve a seat.
The free workshops are targeting residents who are behind on mortgage payments or expect to be soon.
‘‘Prince George’s County has been one of the hardest hit counties in the state,” Harrington said. ‘‘People can barely turn around and their houses are gone.”
Cora Ganzglass, an attorney with Legal Aid, a Prince George’s group that gives free legal service to low-income residents, said part of the problem here and across the country is ‘‘exotic mortgages.” For homebuyers who signed on to adjustable rate mortgages a few years ago at low teaser rates, those rates are resetting now, making them less affordable.
‘‘People were given loans that they could never afford,” said Ganzglass, who is coordinating the workshops.
Donna Badgett Hurley, coalition member and director of the Oxon Hill-based counseling group Housing Options and Planning Enterprises, said the workshops will probably continue into next year, even though only nine have been put on the calendar.
‘‘The whole idea is to be proactive, because the ... earlier you start the process, the more options you have,” she said. ‘‘[Lenders] really don’t want that foreclosure ... because they lose money.”
The local workshops will coach residents in danger of foreclosure on how to keep their homes, but will also tell them how to avoid scams aimed at desperate homeowners.
Thomas Perez, secretary of the Maryland Department of Labor, Licensing and Regulation, has launched 127 investigations this year into questionable mortgage cases.
The labor department last month announced the first ‘‘foreclosure rescue scam” conviction in state history.
Prince George’s State’s Attorney Glenn F. Ivey’s office prosecuted defendant Perver Lee Taylor, who pleaded guilty in Circuit Court to a felony theft charge in connection with a foreclosure rescue scam and was sentenced to 10 years in jail, with all but 12 weeks suspended. Taylor was required to repay $40,000 stolen from a victim, whom Taylor made transfer ownership of her home. Investigators found Taylor tried to take the home, evict the victim and sell the property.
A report released over the summer by the Association of Community Organizations for Reform Now also showed that foreclosures are highest in the central and southwestern parts of Prince George’s County. The study urged local governments to provide funding for borrowers about to lose their homes and for housing counseling programs.
Harrington said the new coalition is not funded, but that the individual organizations participating in the program have applied for funding from a state task force on homeownership preservation.
What: Foreclosure counseling workshops
When: Weekly, beginning 7 p.m. today
Where: Hyattsville Municipal Building, 4310 Gallatin St.
Contact: 301-883-5570
Admission: Free
Reservations required
For a complete schedule of the foreclosure workshops, see www.gazette.net⁄links.
A new group of lenders, government officials and community advocates in Prince George’s County plans to kick off a set of weekly workshops Sept. 13 in Hyattsville to counsel residents on foreclosures and help stem a problem that is worse in the county than anywhere in Maryland.
Prince George’s County recorded more foreclosures in the first seven months of this year than any other Maryland county. The 2,800 foreclosures were more than triple the number during the same period last year, according to data company RealtyTrac. The increase accompanied a statewide and nationwide surge in foreclosures.
‘‘There are so many people being foreclosed on that the counselors can’t see them,” said Mosi Harrington, a member of the Prince George’s County Coalition for Homeownership Preservation.
The homeownership coalition, which includes the Prince George’s Housing Department, was formed this spring to educate residents on how to negotiate with lenders before they lose their homes, Harrington said. She said many residents never even try to negotiate.
Through its new program, the coalition will sponsor a two-hour workshop hosted by a different nonprofit counseling organization every week through November. The set of meetings starts at 7 p.m. today at the Hyattsville Municipal Building located at 4310 Gallatin St. Residents should call 301-883-5570 to reserve a seat.
The free workshops are targeting residents who are behind on mortgage payments or expect to be soon.
‘‘Prince George’s County has been one of the hardest hit counties in the state,” Harrington said. ‘‘People can barely turn around and their houses are gone.”
Cora Ganzglass, an attorney with Legal Aid, a Prince George’s group that gives free legal service to low-income residents, said part of the problem here and across the country is ‘‘exotic mortgages.” For homebuyers who signed on to adjustable rate mortgages a few years ago at low teaser rates, those rates are resetting now, making them less affordable.
‘‘People were given loans that they could never afford,” said Ganzglass, who is coordinating the workshops.
Donna Badgett Hurley, coalition member and director of the Oxon Hill-based counseling group Housing Options and Planning Enterprises, said the workshops will probably continue into next year, even though only nine have been put on the calendar.
‘‘The whole idea is to be proactive, because the ... earlier you start the process, the more options you have,” she said. ‘‘[Lenders] really don’t want that foreclosure ... because they lose money.”
The local workshops will coach residents in danger of foreclosure on how to keep their homes, but will also tell them how to avoid scams aimed at desperate homeowners.
Thomas Perez, secretary of the Maryland Department of Labor, Licensing and Regulation, has launched 127 investigations this year into questionable mortgage cases.
The labor department last month announced the first ‘‘foreclosure rescue scam” conviction in state history.
Prince George’s State’s Attorney Glenn F. Ivey’s office prosecuted defendant Perver Lee Taylor, who pleaded guilty in Circuit Court to a felony theft charge in connection with a foreclosure rescue scam and was sentenced to 10 years in jail, with all but 12 weeks suspended. Taylor was required to repay $40,000 stolen from a victim, whom Taylor made transfer ownership of her home. Investigators found Taylor tried to take the home, evict the victim and sell the property.
A report released over the summer by the Association of Community Organizations for Reform Now also showed that foreclosures are highest in the central and southwestern parts of Prince George’s County. The study urged local governments to provide funding for borrowers about to lose their homes and for housing counseling programs.
Harrington said the new coalition is not funded, but that the individual organizations participating in the program have applied for funding from a state task force on homeownership preservation.
What: Foreclosure counseling workshops
When: Weekly, beginning 7 p.m. today
Where: Hyattsville Municipal Building, 4310 Gallatin St.
Contact: 301-883-5570
Admission: Free
Reservations required
For a complete schedule of the foreclosure workshops, see www.gazette.net⁄links.
Tuesday, September 18, 2007
Baltimore County cracks down on housing code violators
Baltimore County officials hope to reduce the number "nuisance houses" and reports of students misbehaving in off-campus housing by cracking down on land lords who violate the County's zoning code.
The Baltimore County zoning code states that unless a structure is zoned as a "boarding or rooming house" no more than two unrelated individuals may reside in the same home. The code does not apply to apartment buildings.
Baltimore County spokeswoman Ellen Kobler said the code isn't new, but the push to have residents report violations stems from "complaints in the community."
In August the County issued a press release, coinciding with the start of the fall semester, to remind residents and students about the County's housing code. The release also urged residents to report any housing code violations they observe.
Kobler said the fines can reach $200 daily for each housing code violation at a residence.
"If an infraction is found, there would be a violation notice and a citation sent to the residents and the land lord," Kobler said. "If necessary it could go to a hearing board."
The County is also reaching out to colleges in Baltimore County, including Towson University, to educate students about proper behavior students should display while living in residential communities.
"There's a real effort made on the part of the University and the County to be mutually beneficial to each other," Kobler said. "The county executive works with officials from Towson, and we know that a majority of students are good neighbors. We just want to ensure that everybody is following rules so that people can live comfortably."
Jana Varwig, associate vice president for student affairs, said students who live off-campus received letters during the summer about the University's expectation for students in Towson's residential neighborhoods. The letter did not specifically focus on the County's housing code, she said.
"The University does not see its role as managing this particular code. We will be glad to make sure that students are aware, but it's not our role to enforce it," Varwig said.
Varwig said that she believes the surrounding community is accepting of TU students.
"We have some very welcoming neighbors. Many of our neighbors went to college and are willing to work with students. But sometime there are some instances where students' behavior crosses the line," she said. "Noise, intoxicated behavior, public urination, all that can be troubling to live next door to. Our real tactic is to do what we can to educate students so they can learn to be good neighbors. It's part of moving off campus and growing up."
Most of the complaints about TU students are related to noise violations rather than housing code violations, Varwig said.
Students who violate the University's code of conduct could face fines, and an investigation from judicial affairs.
In Fall 2006 judicial affairs received 38 complaints about houses and issued 15 warnings.
"If we receive a complaint, an officer from the Towson University Police Department and a student life representative will visit the house to talk to the students about how to work with their neighbors," she said. "If we receive another complaint, then we'll launch an investigation. And we can charge the student up to $250. They could also be placed on University probation." (www.thetowerlight.com)
The Baltimore County zoning code states that unless a structure is zoned as a "boarding or rooming house" no more than two unrelated individuals may reside in the same home. The code does not apply to apartment buildings.
Baltimore County spokeswoman Ellen Kobler said the code isn't new, but the push to have residents report violations stems from "complaints in the community."
In August the County issued a press release, coinciding with the start of the fall semester, to remind residents and students about the County's housing code. The release also urged residents to report any housing code violations they observe.
Kobler said the fines can reach $200 daily for each housing code violation at a residence.
"If an infraction is found, there would be a violation notice and a citation sent to the residents and the land lord," Kobler said. "If necessary it could go to a hearing board."
The County is also reaching out to colleges in Baltimore County, including Towson University, to educate students about proper behavior students should display while living in residential communities.
"There's a real effort made on the part of the University and the County to be mutually beneficial to each other," Kobler said. "The county executive works with officials from Towson, and we know that a majority of students are good neighbors. We just want to ensure that everybody is following rules so that people can live comfortably."
Jana Varwig, associate vice president for student affairs, said students who live off-campus received letters during the summer about the University's expectation for students in Towson's residential neighborhoods. The letter did not specifically focus on the County's housing code, she said.
"The University does not see its role as managing this particular code. We will be glad to make sure that students are aware, but it's not our role to enforce it," Varwig said.
Varwig said that she believes the surrounding community is accepting of TU students.
"We have some very welcoming neighbors. Many of our neighbors went to college and are willing to work with students. But sometime there are some instances where students' behavior crosses the line," she said. "Noise, intoxicated behavior, public urination, all that can be troubling to live next door to. Our real tactic is to do what we can to educate students so they can learn to be good neighbors. It's part of moving off campus and growing up."
Most of the complaints about TU students are related to noise violations rather than housing code violations, Varwig said.
Students who violate the University's code of conduct could face fines, and an investigation from judicial affairs.
In Fall 2006 judicial affairs received 38 complaints about houses and issued 15 warnings.
"If we receive a complaint, an officer from the Towson University Police Department and a student life representative will visit the house to talk to the students about how to work with their neighbors," she said. "If we receive another complaint, then we'll launch an investigation. And we can charge the student up to $250. They could also be placed on University probation." (www.thetowerlight.com)
Mayor Dixon Focusing On Development, New Top Cop
The election is behind her and Mayor Sheila Dixon is looking ahead to perhaps her most looming task: appointing a top cop for Baltimore.
"I'm going to make a decision very soon because we need to have the police department focused and not worried about who's going to be the commissioner," Dixon said.
A biotechnology park next to Johns Hopkins is already in the works and now the mayor wants to focus on developing the east side of the city around it, with businesses, housing and a new charter school. In all, it's a project that requires some creative financing, borrowing $85 million.
"So that whole area is going to be stimulated by helping families in the community one, be able to have opportunities for jobs and training, two, quality housing, and then three, a great K-8 school that's going to focus on medical and bio to prepare our kids to get in that arena," she said.
City council members have priorities of their own. Council President Stephanie Rawlings-Blake, fresh off her election victory, is targeting heroin addiction, hoping to push for more doctors in the city to prescribe the treatment drug buprenorphine.
"Heroin addiction is a terrible problem in the city and if we make inroads in heroin addiction, we would slow the engine that is our criminal justice system down," Rawlings-Blake said.
Among the dozens of other bills high on the administration's priority list: regulating valet parking services in the city and reserving some city parking spaces for car-sharing vehicles.
The mayor has a deadline. These bills must be acted on by the first week in December, when the new councilmembers take office. If not, those bills will have to be introduced all over again.(CBS Broadcasting Inc. All Rights Reserved.)
"I'm going to make a decision very soon because we need to have the police department focused and not worried about who's going to be the commissioner," Dixon said.
A biotechnology park next to Johns Hopkins is already in the works and now the mayor wants to focus on developing the east side of the city around it, with businesses, housing and a new charter school. In all, it's a project that requires some creative financing, borrowing $85 million.
"So that whole area is going to be stimulated by helping families in the community one, be able to have opportunities for jobs and training, two, quality housing, and then three, a great K-8 school that's going to focus on medical and bio to prepare our kids to get in that arena," she said.
City council members have priorities of their own. Council President Stephanie Rawlings-Blake, fresh off her election victory, is targeting heroin addiction, hoping to push for more doctors in the city to prescribe the treatment drug buprenorphine.
"Heroin addiction is a terrible problem in the city and if we make inroads in heroin addiction, we would slow the engine that is our criminal justice system down," Rawlings-Blake said.
Among the dozens of other bills high on the administration's priority list: regulating valet parking services in the city and reserving some city parking spaces for car-sharing vehicles.
The mayor has a deadline. These bills must be acted on by the first week in December, when the new councilmembers take office. If not, those bills will have to be introduced all over again.(CBS Broadcasting Inc. All Rights Reserved.)
Monday, September 17, 2007
Court to hear foreclosure case
Decision in appeal by Howard Co. man could affect similar cases
The Maryland Court of Appeals has agreed to hear arguments in the foreclosure case of Kwaku Atta Poku, the Columbia cab owner who lost his home after refinancing, despite making every mortgage payment.
The decision by the state's highest court to review the case pleased Atta Poku and his lawyers, and the outcome also could affect how Maryland courts handle similar cases as foreclosures become more common in the slumping Maryland housing market.
Gerald M. Richman of Ellicott City, one of Atta Poku's lawyers, said the court will "determine whether or not you have a right to appeal a foreclosure action."
Another issue is whether a home can be foreclosed on when the lender has exclusive control of the funds to pay off the mortgage. Atta Poku never had possession of the settlement check involved in the 2001 refinancing that later resulted in foreclosure. He could not prove the mortgage was paid, however, because a bank lost the original check.
The Court of Appeals said a hearing will be scheduled in December after submission of legal briefs, according to an order received Friday by another of Atta Poku's lawyers, Scott C. Borison of Frederick, a foreclosure specialist.
Depending on what the court decides, homeowners could gain a better chance to defend themselves.
"It may alter the [foreclosure] process," Richman said.
Maryland law allows mortgage holders to foreclose in a few weeks, without having to prove the homeowner was notified.
"It's predictable there will be other people like Mr. Atta Poku," said Phillip Robinson, executive director of Civil Justice Inc., a nonprofit public advocacy law firm that has been allowed by the court to join in the Atta Poku case. "We're also seeing a substantial increase in the number of title companies using escrow funds to pay operating expenses."
With some members of the General Assembly planning to revise Maryland's laws next year to give homeowners more time and notice to fight mortgage company foreclosures, Robinson said the Court of Appeals could help by clarifying the legal issues.
For Atta Poku, the news stirred an emotional response.
"Oh ... oh ... I don't know what to say," he said, after hearing Monday of the court's action. "I didn't have a chance [in court]. All that I tried was in vain."
The 2005 foreclosure on his Columbia townhouse, and his family's August 2006 eviction, was upheld May 8 by the Maryland Court of Special Appeals on what his lawyers said were technical grounds, including his inability to post a required bond. The Court of Appeals decision gives Atta Poku new hope and a chance to argue the substance of his case, his lawyers said.
Borison and Richman said Atta Poku will not regain possession of his house, which was sold after the foreclosure.
But if the Court of Appeals decides the taking was not justified, it would give Atta Poku a stronger legal basis for damage claims that he is also seeking.
Washington Mutual Inc., the Seattle-based mortgage company that took his house, maintains that its action was proper, pointing to court rulings that sustained the foreclosure. Shane A. Winn, a company spokesman, declined to comment yesterday, noting pending litigation.
"Oh, my Lord, that's wonderful!" Richman said when he learned of the court's decision to hear the appeal.
Robinson said the court takes fewer than 10 percent of the cases it is requested to review.
Atta Poku's house was sold less than six weeks after he first received notice that Washington Mutual, which refinanced his loan in 2001, claimed that the first mortgage was never paid off.
Atta Poku, 55, a naturalized American citizen originally from Ghana, was unable to prove in court that the loan was paid, as he insists it was, partly because the financial institutions involved lost some of the documents.
Although no one -- including Washington Mutual -- has blamed him for the alleged default, he lost the house, has ruined credit and his AAAA Star cab business was damaged.
The family of five, including his wife and three children younger than age 5, is being aided by a small cash fund administered by Columbia's Grassroots Crisis Intervention Center, and by Congregations Concerned for the Homeless, a Howard County nonprofit group that rented a three-bedroom townhouse last week for the family to sublet. (By Larry Carson, Sun reporter)
The Maryland Court of Appeals has agreed to hear arguments in the foreclosure case of Kwaku Atta Poku, the Columbia cab owner who lost his home after refinancing, despite making every mortgage payment.
The decision by the state's highest court to review the case pleased Atta Poku and his lawyers, and the outcome also could affect how Maryland courts handle similar cases as foreclosures become more common in the slumping Maryland housing market.
Gerald M. Richman of Ellicott City, one of Atta Poku's lawyers, said the court will "determine whether or not you have a right to appeal a foreclosure action."
Another issue is whether a home can be foreclosed on when the lender has exclusive control of the funds to pay off the mortgage. Atta Poku never had possession of the settlement check involved in the 2001 refinancing that later resulted in foreclosure. He could not prove the mortgage was paid, however, because a bank lost the original check.
The Court of Appeals said a hearing will be scheduled in December after submission of legal briefs, according to an order received Friday by another of Atta Poku's lawyers, Scott C. Borison of Frederick, a foreclosure specialist.
Depending on what the court decides, homeowners could gain a better chance to defend themselves.
"It may alter the [foreclosure] process," Richman said.
Maryland law allows mortgage holders to foreclose in a few weeks, without having to prove the homeowner was notified.
"It's predictable there will be other people like Mr. Atta Poku," said Phillip Robinson, executive director of Civil Justice Inc., a nonprofit public advocacy law firm that has been allowed by the court to join in the Atta Poku case. "We're also seeing a substantial increase in the number of title companies using escrow funds to pay operating expenses."
With some members of the General Assembly planning to revise Maryland's laws next year to give homeowners more time and notice to fight mortgage company foreclosures, Robinson said the Court of Appeals could help by clarifying the legal issues.
For Atta Poku, the news stirred an emotional response.
"Oh ... oh ... I don't know what to say," he said, after hearing Monday of the court's action. "I didn't have a chance [in court]. All that I tried was in vain."
The 2005 foreclosure on his Columbia townhouse, and his family's August 2006 eviction, was upheld May 8 by the Maryland Court of Special Appeals on what his lawyers said were technical grounds, including his inability to post a required bond. The Court of Appeals decision gives Atta Poku new hope and a chance to argue the substance of his case, his lawyers said.
Borison and Richman said Atta Poku will not regain possession of his house, which was sold after the foreclosure.
But if the Court of Appeals decides the taking was not justified, it would give Atta Poku a stronger legal basis for damage claims that he is also seeking.
Washington Mutual Inc., the Seattle-based mortgage company that took his house, maintains that its action was proper, pointing to court rulings that sustained the foreclosure. Shane A. Winn, a company spokesman, declined to comment yesterday, noting pending litigation.
"Oh, my Lord, that's wonderful!" Richman said when he learned of the court's decision to hear the appeal.
Robinson said the court takes fewer than 10 percent of the cases it is requested to review.
Atta Poku's house was sold less than six weeks after he first received notice that Washington Mutual, which refinanced his loan in 2001, claimed that the first mortgage was never paid off.
Atta Poku, 55, a naturalized American citizen originally from Ghana, was unable to prove in court that the loan was paid, as he insists it was, partly because the financial institutions involved lost some of the documents.
Although no one -- including Washington Mutual -- has blamed him for the alleged default, he lost the house, has ruined credit and his AAAA Star cab business was damaged.
The family of five, including his wife and three children younger than age 5, is being aided by a small cash fund administered by Columbia's Grassroots Crisis Intervention Center, and by Congregations Concerned for the Homeless, a Howard County nonprofit group that rented a three-bedroom townhouse last week for the family to sublet. (By Larry Carson, Sun reporter)
Friday, September 14, 2007
Foreclosure rates climb
Marylanders better off than nation overall as variable mortgages reset
As homeowners struggled to make higher payments on adjustable mortgages, the rate of new foreclosures this spring soared to its highest level in the nearly three decades that records have been kept. Maryland, however, had a smaller rate of new foreclosures than many states.
The handful of large states feeling the brunt of the credit crisis helped to push new foreclosures in the second quarter to 0.65 percent, or 65 for every 10,000 loans, the Mortgage Bankers Association said yesterday. The rate of residential loans considered delinquent (at least three months past due) jumped to more than 5 percent of the nation's 44 million loans, up from 4.37 percent of loans in spring 2006.
Maryland, which has faced a less severe housing downturn than other states, had a lower rate of loans entering foreclosure -- 0.36 percent. Of the just over 1 million loans being serviced in the state, about 3,750 were sent foreclosure notices in the second quarter, the bankers association said. The MBA figures for states are not seasonally adjusted. On a nonadjusted basis, the U.S. had new foreclosures at a rate of 0.59 percent.
In Maryland, though the percentage of new foreclosures was small, it has grown rapidly. In the second quarter of 2006, Maryland's rate was 0.19 percent, having nearly doubled. That is still less than rates as recently as several years ago, when Maryland's rate often topped 0.50.
Delinquencies and foreclosures are rising primarily because of homeowners falling behind on payments as adjustable rates have reset, said Doug Duncan, the banking association's chief economist. Many borrowers took out adjustable loans with lower introductory rates as a way to afford homes that soared in value during the real estate boom.
The adjustable loans make up a big share of mortgages in states such as California, Florida, Nevada and Arizona, where investors were especially active and contributed to soaring real estate values that have since fallen, the MBA data showed.
"They are seeing declining house prices, which makes refinancing these ARMs difficult," Duncan said.
"The same forces at work nationally are at work in Maryland; they just haven't had as severe an impact," said Anirban Basu, chief executive of the Baltimore economic consulting firm Sage Policy Group Inc.
"Many people took on adjustable-rate mortgages, and many of those mortgages are still in the process of resetting, and there still are people finding they cannot afford those mortgages," Basu added. "Housing appreciation has slowed in Maryland ... and that is conducive to higher levels of foreclosure."
Phillip R. Robinson, executive director of Civil Justice Inc., a public interest law group in Maryland that helps victims of predatory real estate practices, said much of the data on foreclosure and delinquency rates appears to be conflicting.
But he said it is clear from the deluge of borrowers turning to his group for help that the number of homeowners in danger of losing their homes to foreclosure is increasing steadily.
"There's a dramatic increase and shift in the kind of homeowner calling us," Robinson said. Previously, his group saw mostly "a homeowner who's had a devastating life event and is not able to make payments."
But now, he continued, "We're seeing a huge increase of very-good-credit borrowers who got mortgage loans that were unsuitable for them in the first place. The professional they relied on steered them to the highest-cost loan in which the professional could make a profit. They've gotten themselves in over their head. These are prime borrowers in subprime loans."
Still, Maryland has fared better than many states and the nation as a whole.
"Housing prices in Maryland have by and large held up pretty well," Basu said. "There is no part of the state where housing prices have fallen substantially ... so as a result when people fall behind on their mortgages, they don't go into foreclosure. They can sell their home."
Delinquency rates in the United States rose from the second quarter of 2006 for both prime loans and subprime, which are loans made to borrowers with weak credit, according to the MBA report, a survey of about 120 mortgage bankers, commercial banks and thrifts.
Duncan, of the MBA, said turmoil that has emerged in the credit markets since the end of the second quarter has further limited borrowing options for homeowners wanting to refinance high-cost loans.
And that means, he said, more increases in delinquencies and foreclosures before those rates hit a peak.
The upward trend, Duncan predicted, probably will continue more than the one to three economic quarters previously forecast.
(By Lorraine Mirabella, Baltimore Sun reporter)
As homeowners struggled to make higher payments on adjustable mortgages, the rate of new foreclosures this spring soared to its highest level in the nearly three decades that records have been kept. Maryland, however, had a smaller rate of new foreclosures than many states.
The handful of large states feeling the brunt of the credit crisis helped to push new foreclosures in the second quarter to 0.65 percent, or 65 for every 10,000 loans, the Mortgage Bankers Association said yesterday. The rate of residential loans considered delinquent (at least three months past due) jumped to more than 5 percent of the nation's 44 million loans, up from 4.37 percent of loans in spring 2006.
Maryland, which has faced a less severe housing downturn than other states, had a lower rate of loans entering foreclosure -- 0.36 percent. Of the just over 1 million loans being serviced in the state, about 3,750 were sent foreclosure notices in the second quarter, the bankers association said. The MBA figures for states are not seasonally adjusted. On a nonadjusted basis, the U.S. had new foreclosures at a rate of 0.59 percent.
In Maryland, though the percentage of new foreclosures was small, it has grown rapidly. In the second quarter of 2006, Maryland's rate was 0.19 percent, having nearly doubled. That is still less than rates as recently as several years ago, when Maryland's rate often topped 0.50.
Delinquencies and foreclosures are rising primarily because of homeowners falling behind on payments as adjustable rates have reset, said Doug Duncan, the banking association's chief economist. Many borrowers took out adjustable loans with lower introductory rates as a way to afford homes that soared in value during the real estate boom.
The adjustable loans make up a big share of mortgages in states such as California, Florida, Nevada and Arizona, where investors were especially active and contributed to soaring real estate values that have since fallen, the MBA data showed.
"They are seeing declining house prices, which makes refinancing these ARMs difficult," Duncan said.
"The same forces at work nationally are at work in Maryland; they just haven't had as severe an impact," said Anirban Basu, chief executive of the Baltimore economic consulting firm Sage Policy Group Inc.
"Many people took on adjustable-rate mortgages, and many of those mortgages are still in the process of resetting, and there still are people finding they cannot afford those mortgages," Basu added. "Housing appreciation has slowed in Maryland ... and that is conducive to higher levels of foreclosure."
Phillip R. Robinson, executive director of Civil Justice Inc., a public interest law group in Maryland that helps victims of predatory real estate practices, said much of the data on foreclosure and delinquency rates appears to be conflicting.
But he said it is clear from the deluge of borrowers turning to his group for help that the number of homeowners in danger of losing their homes to foreclosure is increasing steadily.
"There's a dramatic increase and shift in the kind of homeowner calling us," Robinson said. Previously, his group saw mostly "a homeowner who's had a devastating life event and is not able to make payments."
But now, he continued, "We're seeing a huge increase of very-good-credit borrowers who got mortgage loans that were unsuitable for them in the first place. The professional they relied on steered them to the highest-cost loan in which the professional could make a profit. They've gotten themselves in over their head. These are prime borrowers in subprime loans."
Still, Maryland has fared better than many states and the nation as a whole.
"Housing prices in Maryland have by and large held up pretty well," Basu said. "There is no part of the state where housing prices have fallen substantially ... so as a result when people fall behind on their mortgages, they don't go into foreclosure. They can sell their home."
Delinquency rates in the United States rose from the second quarter of 2006 for both prime loans and subprime, which are loans made to borrowers with weak credit, according to the MBA report, a survey of about 120 mortgage bankers, commercial banks and thrifts.
Duncan, of the MBA, said turmoil that has emerged in the credit markets since the end of the second quarter has further limited borrowing options for homeowners wanting to refinance high-cost loans.
And that means, he said, more increases in delinquencies and foreclosures before those rates hit a peak.
The upward trend, Duncan predicted, probably will continue more than the one to three economic quarters previously forecast.
(By Lorraine Mirabella, Baltimore Sun reporter)
Monday, August 27, 2007
Foreclosure fallout: Rescue scams
Scammers are taking advantage of mortgage holders at their most vulnerable - when they're about to lose their homes.
NEW YORK (CNNMoney.com) -- Jennifer Falke and her family had been in their Columbus, Ohio, home for nearly 12 years when they hit a rough patch in 2006. Falke was out of work and fell behind on the mortgage.
Falke said a flood of mailings and flyers then arrived at her door promising help from foreclosure rescue companies claiming to act as an intermediary between her and her lender to keep her from losing her home.
According to Falke, the company she contacted, Foreclosure Assistance Solutions (FAS), simply took her money and did nothing for her. And by delaying a workout with her lender, it made getting back on track harder and more expensive.
"I called the company, thinking it was the best thing I could do," she said. "They told me they could help. But one of the first things they said was, 'Don't call your mortgage company. If you do they'll tack on fees.'"
For a $1,200 payment, according to Falke, FAS claimed it would handle everything, including calls to the lender, but she charges it did nothing.
"Every time I got enough together to pay off the arrears, they would say the amount had increased." Falke received an income tax refund that she wanted to put toward a payment. But according to her, FAS said her mortgage company said it wasn't enough.
"Then they stopped answering my calls. I would leave a message every day," Falke said. "One day, they told me, 'We're dropping your case' and hung up on me."
Only then did she call her lender. Falke found out the payoff was less than what FAS had told her - $2,600 instead of $3,500. And then she learned that the bank had dealt with many cases like hers.
"To prey on people at one of the most vulnerable points in their lives is despicable," said Ohio Attorney General Mark Dann, who filed suit earlier this month against six foreclosure rescue companies, including FAS, who he claims snared Ohio residents in their webs.
FAS did not return a phone message asking for comment.
As foreclosure rates rise, evidence from other parts of the country indicates the number of rescue scams may be increasing. According to Alison Preszler, a spokeswoman for the Council of Better Business Bureaus, the BBB for Clearwater, Florida, received 508 complaints about local foreclosure rescue companies in the past three years with 322 coming just within the last 12 months.
Charlotte, North Carolina's BBB office reported last year that two foreclosure rescue companies were operating; today the count is 15 and six have already had legal actions taken against them. Twenty-one new companies began operations this year in Cleveland.
According to Dann, the most common form of foreclosure rescue scam in Ohio is like the one Falke claims was used on her. A scammer takes an up-front fee, usually $1,000 or more, to solve the victim's foreclosure problems, and then does little or nothing, pocketing the money.
Dann said victims are often low-income minorities, the elderly or immigrants in poor neighborhoods, but anyone can be targeted.
The most vulnerable members of society often make the easiest marks. A client of Jessica Attie of South Brooklyn Legal Services, was a mentally ill woman with a $60,000 mortgage balance that carried an interest rate of more than 10 percent. She was falling behind on payments, had few other resources and wanted to reduce her payments.
Attie said a scam artist convinced her client to sign over her title while he cleared up the arrears. She could rent the home for six months, and then he would sell it back to her. Instead, according to Attie, the scammer resold the house and absconded with more than $400,000.
Michael Sichenzia knows mortgage rescue scams from the inside out; in 2002, he was convicted and served hard time for mortgage fraud at the Attica Correctional Facility in New York State. Today he's an investigator for the Deerfield Beach, Florida law firm, Glinn Somera & Silva and chief operating officer of Dynamic Consulting Services, specializing in financial fraud.
According to Sichenzia, the most common foreclosure rescue scam has always been "equity stripping."
"The scammer promises to save the home by taking title," he said, "renting it to the owner and selling it back sometime later. Instead, he strips the equity by charging excessive fees, doing phony renovations and not making the mortgage payments."
Sometimes the home owner is fully aware that the title is changing hands, counting on the promise to be able to redeem it later. But other times the scammer tricks the owner.
"The signing over of title is buried in an avalanche of paperwork or in the language of the contracts," said Sichenzia.
Duane Legate, who runs Housebuyernetwork.com, which arranges short sales for homeowners in trouble and also offers foreclosure prevention advice, said, "There's only a handful of legitimate companies out there, ones that really do try to help clients. The rest are just looking for a quick payoff."
According to Legate, the scammers are multiplying so rapidly that there's even a company that sells foreclosure rescue Web sites, complete with testimonials from smiling, satisfied clients.
Here are some of the tactics that scammers are known to use:
* Saturation marketing: They learn of mortgage delinquencies through published reports and proceed to bombard the owners with phone calls, flyers and posters.
* Exploiting trust: Scammers build trust by acting sympathetic and solicitous; many owners can't believe they would lie to their faces.
* Isolating owners: Scammers assure victims that they'll handle everything. They tell them not to call their lenders nor seek legal advice.
* Outright fraud: Scammers have homeowners sign blank papers and fill them in afterward or they sneak the paperwork through without telling victims what they're signing.
* Affinity marketing: Especially among minorities and sometimes evangelical church congregations, a scammer builds trust based on a common ethnicity or religion.
According to Dann, you should never trust anyone who has contacted you, unsolicited, offering to help. "There are no boundaries to entry for any entrepreneurial criminal to get into these scams."
The best thing to do is to call your lender and try to work out a plan. If in doubt, get in touch with your state attorney general's office. It can put you in touch with a Housing and Urban Development-approved free credit counseling service that will do you a lot more good than fee-based rescue services.
Jennifer Falke was able to work out a settlement with her bank. She's back to work and current with her mortgage payments, but she is out the $1,200 she paid to FAS.
"The ingenuity of people who would rather cheat than work hard is unending," said Dann. (http://money.cnn.com)
NEW YORK (CNNMoney.com) -- Jennifer Falke and her family had been in their Columbus, Ohio, home for nearly 12 years when they hit a rough patch in 2006. Falke was out of work and fell behind on the mortgage.
Falke said a flood of mailings and flyers then arrived at her door promising help from foreclosure rescue companies claiming to act as an intermediary between her and her lender to keep her from losing her home.
According to Falke, the company she contacted, Foreclosure Assistance Solutions (FAS), simply took her money and did nothing for her. And by delaying a workout with her lender, it made getting back on track harder and more expensive.
"I called the company, thinking it was the best thing I could do," she said. "They told me they could help. But one of the first things they said was, 'Don't call your mortgage company. If you do they'll tack on fees.'"
For a $1,200 payment, according to Falke, FAS claimed it would handle everything, including calls to the lender, but she charges it did nothing.
"Every time I got enough together to pay off the arrears, they would say the amount had increased." Falke received an income tax refund that she wanted to put toward a payment. But according to her, FAS said her mortgage company said it wasn't enough.
"Then they stopped answering my calls. I would leave a message every day," Falke said. "One day, they told me, 'We're dropping your case' and hung up on me."
Only then did she call her lender. Falke found out the payoff was less than what FAS had told her - $2,600 instead of $3,500. And then she learned that the bank had dealt with many cases like hers.
"To prey on people at one of the most vulnerable points in their lives is despicable," said Ohio Attorney General Mark Dann, who filed suit earlier this month against six foreclosure rescue companies, including FAS, who he claims snared Ohio residents in their webs.
FAS did not return a phone message asking for comment.
As foreclosure rates rise, evidence from other parts of the country indicates the number of rescue scams may be increasing. According to Alison Preszler, a spokeswoman for the Council of Better Business Bureaus, the BBB for Clearwater, Florida, received 508 complaints about local foreclosure rescue companies in the past three years with 322 coming just within the last 12 months.
Charlotte, North Carolina's BBB office reported last year that two foreclosure rescue companies were operating; today the count is 15 and six have already had legal actions taken against them. Twenty-one new companies began operations this year in Cleveland.
According to Dann, the most common form of foreclosure rescue scam in Ohio is like the one Falke claims was used on her. A scammer takes an up-front fee, usually $1,000 or more, to solve the victim's foreclosure problems, and then does little or nothing, pocketing the money.
Dann said victims are often low-income minorities, the elderly or immigrants in poor neighborhoods, but anyone can be targeted.
The most vulnerable members of society often make the easiest marks. A client of Jessica Attie of South Brooklyn Legal Services, was a mentally ill woman with a $60,000 mortgage balance that carried an interest rate of more than 10 percent. She was falling behind on payments, had few other resources and wanted to reduce her payments.
Attie said a scam artist convinced her client to sign over her title while he cleared up the arrears. She could rent the home for six months, and then he would sell it back to her. Instead, according to Attie, the scammer resold the house and absconded with more than $400,000.
Michael Sichenzia knows mortgage rescue scams from the inside out; in 2002, he was convicted and served hard time for mortgage fraud at the Attica Correctional Facility in New York State. Today he's an investigator for the Deerfield Beach, Florida law firm, Glinn Somera & Silva and chief operating officer of Dynamic Consulting Services, specializing in financial fraud.
According to Sichenzia, the most common foreclosure rescue scam has always been "equity stripping."
"The scammer promises to save the home by taking title," he said, "renting it to the owner and selling it back sometime later. Instead, he strips the equity by charging excessive fees, doing phony renovations and not making the mortgage payments."
Sometimes the home owner is fully aware that the title is changing hands, counting on the promise to be able to redeem it later. But other times the scammer tricks the owner.
"The signing over of title is buried in an avalanche of paperwork or in the language of the contracts," said Sichenzia.
Duane Legate, who runs Housebuyernetwork.com, which arranges short sales for homeowners in trouble and also offers foreclosure prevention advice, said, "There's only a handful of legitimate companies out there, ones that really do try to help clients. The rest are just looking for a quick payoff."
According to Legate, the scammers are multiplying so rapidly that there's even a company that sells foreclosure rescue Web sites, complete with testimonials from smiling, satisfied clients.
Here are some of the tactics that scammers are known to use:
* Saturation marketing: They learn of mortgage delinquencies through published reports and proceed to bombard the owners with phone calls, flyers and posters.
* Exploiting trust: Scammers build trust by acting sympathetic and solicitous; many owners can't believe they would lie to their faces.
* Isolating owners: Scammers assure victims that they'll handle everything. They tell them not to call their lenders nor seek legal advice.
* Outright fraud: Scammers have homeowners sign blank papers and fill them in afterward or they sneak the paperwork through without telling victims what they're signing.
* Affinity marketing: Especially among minorities and sometimes evangelical church congregations, a scammer builds trust based on a common ethnicity or religion.
According to Dann, you should never trust anyone who has contacted you, unsolicited, offering to help. "There are no boundaries to entry for any entrepreneurial criminal to get into these scams."
The best thing to do is to call your lender and try to work out a plan. If in doubt, get in touch with your state attorney general's office. It can put you in touch with a Housing and Urban Development-approved free credit counseling service that will do you a lot more good than fee-based rescue services.
Jennifer Falke was able to work out a settlement with her bank. She's back to work and current with her mortgage payments, but she is out the $1,200 she paid to FAS.
"The ingenuity of people who would rather cheat than work hard is unending," said Dann. (http://money.cnn.com)
Thursday, August 23, 2007
756 to share $1 million in housing settlement
Advocates for the disabled announced yesterday that 756 people are in line to share $1 million from the settlement of a Baltimore housing discrimination lawsuit.
A victims' compensation fund was established as part of a landmark 2004 settlement in a lawsuit alleging that thousands of people with disabilities were intentionally or illegally excluded from public housing. Other terms of the settlement, worth more than $100 million, include development of more than 1,000 units of public housing accessible to people with disabilities and a program to help them obtain housing.
The parties in the lawsuit - the Maryland Disability Law Center, the U.S. Department of Justice and the Housing Authority of Baltimore City - jointly filed in U.S. District Court yesterday a recommendation to compensate the 756 people. Both the law center and the justice department had sued the housing authority.
Last summer, officials mailed 40,000 notices to potential housing discrimination victims, urging them to take advantage of the compensation fund. Soup kitchens and shelters also held informational meetings about it. About 2,500 claims were filed, said Lauren Young, the disability law center's legal director.
Assuming the court approves the arrangement, each of the identified victims will receive about $1,300 sometime in the next few months, Young said.
"These payments are given to individuals in recognition that their civil rights were violated based on their disabilities," she said in a statement.
Among those recommended for compensation are people who were denied housing because they used wheelchairs, and a person who had requested grab bars and fell repeatedly in the shower.
University of Baltimore's law school is planning to offer financial counseling sessions for recipients of the money. (baltimoresun.com)
A victims' compensation fund was established as part of a landmark 2004 settlement in a lawsuit alleging that thousands of people with disabilities were intentionally or illegally excluded from public housing. Other terms of the settlement, worth more than $100 million, include development of more than 1,000 units of public housing accessible to people with disabilities and a program to help them obtain housing.
The parties in the lawsuit - the Maryland Disability Law Center, the U.S. Department of Justice and the Housing Authority of Baltimore City - jointly filed in U.S. District Court yesterday a recommendation to compensate the 756 people. Both the law center and the justice department had sued the housing authority.
Last summer, officials mailed 40,000 notices to potential housing discrimination victims, urging them to take advantage of the compensation fund. Soup kitchens and shelters also held informational meetings about it. About 2,500 claims were filed, said Lauren Young, the disability law center's legal director.
Assuming the court approves the arrangement, each of the identified victims will receive about $1,300 sometime in the next few months, Young said.
"These payments are given to individuals in recognition that their civil rights were violated based on their disabilities," she said in a statement.
Among those recommended for compensation are people who were denied housing because they used wheelchairs, and a person who had requested grab bars and fell repeatedly in the shower.
University of Baltimore's law school is planning to offer financial counseling sessions for recipients of the money. (baltimoresun.com)
Tuesday, August 21, 2007
Behind on your mortgage? Ask for help right away
Don't wait until you become delinquent on your mortgage payments or are facing foreclosure before seeking help.
That's the key advice from housing counselors in the Baltimore area, who are trying to get struggling homeowners out from under ballooning mortgage payments.
"The moment they're falling behind, or think they're falling behind, call us immediately," said Ashidda Khalil, director of the Baltimore office of the Neighborhood Assistance Corp. of America, a nonprofit housing advocacy group. "Because for some reason they became afraid, and don't talk to the lender, it gets out of control."
There are several options for Marylanders, especially subprime borrowers, who housing counselors say have seen their monthly payments double in some cases as interest-only or adjustable-rate mortgages (ARMs) reset.
During the housing boom, many buyers stretched to buy a home before prices rose higher. They sought subprime mortgages because they meant lower payments in the first few years.
In addition, lenders made more subprime loans, typically at higher interest rates, to people with spotty credit records.
During 2004 and 2005, subprime loans nearly tripled, according to the Federal Reserve.
But now, as home values flatten or even decline and higher interest rates kick in, many homeowners can't keep up. Those with little or no equity are finding it tough to find new, fixed-rate loans or even sell the house for what they owe.
The state and some nonprofit organizations offer refinancing options for homeowners in dire situations. Many have eligibility requirements, such as income limits.
$1 billion in refinancing
Neighborhood Assistance, for instance, recently announced a commitment of $1 billion to refinance loans of people at risk of losing their homes.
To qualify, homeowners have to have subprime mortgages with interest rates of 10 percent or higher, Khalil said. They can refinance into a 30-year loan with a fixed rate that is 1 percent below market. So far, Khalil said the group has helped several Baltimore homeowners refinance and prevent foreclosure.
Neighborhood Housing Services of Baltimore Inc., a nonprofit group whose mission includes providing affordable housing, offered $1 million to refinance loans between January and May but then ran out of money because of the high demand.
The organization expects to have financing again in October.
Neighborhood Housing also offers emergency loans of up to $5,000 to help homeowners through tough months. The foreclosure process is quick in Maryland and the loans help people buy time, the group said.
"The idea is to forestall things for a limited amount of time and give homeowners time to fix the problem," said Felix Torres, the group's executive director.
"The customer that we were able to refinance basically had subprime loans they couldn't afford," Torres said. "In some cases they could barely afford it, and they were facing interest rates that were just going to push them over the edge."
Funding exhausted
The Community Assistance Network in Dundalk, too, recently exhausted its limited funding to help homeowners avoid delinquency and foreclosures, said Jon Brown, the group's sole housing counselor. The maximum grant is $450, and homeowners would have to provide the difference to bring payments current.
Marylanders also may qualify for the state's new Lifeline Refinance Mortgage program.
The loans, which have income limits, currently carry an interest rate of 6.5 percent.
Lifeline has about a dozen loans in the pipeline and has had about 600 inquiries since June. Officials expect to see an even bigger wave next year when more adjustable-rate mortgages reset, said Russell Thomas, a spokesman for the Department of Housing and Community Development, which administers the program.
Aside from financial help, nonprofit groups provide free counseling. Housing counselors can work with lenders to review options, such as lowering the interest rate.
"We're calling lenders and asking them to modify the loan so this person can continue to live in their home and raise their family," said Khalil of the Neighborhood Assistance. "We're pleading with lenders."
The St. Ambrose Housing Aid Center Inc. is on track this year to see nearly triple the amount of people it normally helps, from 700 to over 2,000 clients. The center said many homeowners had adjustable-rate loans and are now being squeezed. Others got into houses they couldn't afford. Many are coming in too late.
St. Ambrose will contact a homeowner's lender to see if better financing terms can be worked out. The center can also refer people to refinancing programs. It helps to sell the properties if it's too late to save them.
"Many of the families are already behind on their mortgage payments and the options become fewer and fewer," said Lisa Evans, deputy director of St. Ambrose. "People need to come in before their ARMs adjust and before their interest rates increase."
Where to seek help
Here are some places where homeowners struggling to make mortgage payments can turn to for help or further referrals:
• Lifeline Refinance Mortgage Program
A state program that provides refinancing. http://www.dhcd.state.md.us/Lifeline/ 877-462-7555
• St. Ambrose Housing Aid Center Inc.
Offers free counseling and referrals http://www.stambros.org/ 410-366-8550
• Neighborhood Housing Services of Baltimore
Provides emergency loans. It expects to have new funding available for refinancings in October. 410-327-1200
• Neighborhood Assistance Corp. of America
Offers a refinancing program and homeownership counseling. https://www.naca.com/index_main.jsp 410-783-0465
• Maryland attorney general's office
List of foreclosure counseling services http://www.oag.state.md.us/Consumer/foreclose.htm
• Homeownership Preservation Foundation
Hotline for homeowners in danger of facing foreclosure to connect with a U.S. government-approved counselor. Call 888-995-HOPE (4673). (baltimoresun.com)
That's the key advice from housing counselors in the Baltimore area, who are trying to get struggling homeowners out from under ballooning mortgage payments.
"The moment they're falling behind, or think they're falling behind, call us immediately," said Ashidda Khalil, director of the Baltimore office of the Neighborhood Assistance Corp. of America, a nonprofit housing advocacy group. "Because for some reason they became afraid, and don't talk to the lender, it gets out of control."
There are several options for Marylanders, especially subprime borrowers, who housing counselors say have seen their monthly payments double in some cases as interest-only or adjustable-rate mortgages (ARMs) reset.
During the housing boom, many buyers stretched to buy a home before prices rose higher. They sought subprime mortgages because they meant lower payments in the first few years.
In addition, lenders made more subprime loans, typically at higher interest rates, to people with spotty credit records.
During 2004 and 2005, subprime loans nearly tripled, according to the Federal Reserve.
But now, as home values flatten or even decline and higher interest rates kick in, many homeowners can't keep up. Those with little or no equity are finding it tough to find new, fixed-rate loans or even sell the house for what they owe.
The state and some nonprofit organizations offer refinancing options for homeowners in dire situations. Many have eligibility requirements, such as income limits.
$1 billion in refinancing
Neighborhood Assistance, for instance, recently announced a commitment of $1 billion to refinance loans of people at risk of losing their homes.
To qualify, homeowners have to have subprime mortgages with interest rates of 10 percent or higher, Khalil said. They can refinance into a 30-year loan with a fixed rate that is 1 percent below market. So far, Khalil said the group has helped several Baltimore homeowners refinance and prevent foreclosure.
Neighborhood Housing Services of Baltimore Inc., a nonprofit group whose mission includes providing affordable housing, offered $1 million to refinance loans between January and May but then ran out of money because of the high demand.
The organization expects to have financing again in October.
Neighborhood Housing also offers emergency loans of up to $5,000 to help homeowners through tough months. The foreclosure process is quick in Maryland and the loans help people buy time, the group said.
"The idea is to forestall things for a limited amount of time and give homeowners time to fix the problem," said Felix Torres, the group's executive director.
"The customer that we were able to refinance basically had subprime loans they couldn't afford," Torres said. "In some cases they could barely afford it, and they were facing interest rates that were just going to push them over the edge."
Funding exhausted
The Community Assistance Network in Dundalk, too, recently exhausted its limited funding to help homeowners avoid delinquency and foreclosures, said Jon Brown, the group's sole housing counselor. The maximum grant is $450, and homeowners would have to provide the difference to bring payments current.
Marylanders also may qualify for the state's new Lifeline Refinance Mortgage program.
The loans, which have income limits, currently carry an interest rate of 6.5 percent.
Lifeline has about a dozen loans in the pipeline and has had about 600 inquiries since June. Officials expect to see an even bigger wave next year when more adjustable-rate mortgages reset, said Russell Thomas, a spokesman for the Department of Housing and Community Development, which administers the program.
Aside from financial help, nonprofit groups provide free counseling. Housing counselors can work with lenders to review options, such as lowering the interest rate.
"We're calling lenders and asking them to modify the loan so this person can continue to live in their home and raise their family," said Khalil of the Neighborhood Assistance. "We're pleading with lenders."
The St. Ambrose Housing Aid Center Inc. is on track this year to see nearly triple the amount of people it normally helps, from 700 to over 2,000 clients. The center said many homeowners had adjustable-rate loans and are now being squeezed. Others got into houses they couldn't afford. Many are coming in too late.
St. Ambrose will contact a homeowner's lender to see if better financing terms can be worked out. The center can also refer people to refinancing programs. It helps to sell the properties if it's too late to save them.
"Many of the families are already behind on their mortgage payments and the options become fewer and fewer," said Lisa Evans, deputy director of St. Ambrose. "People need to come in before their ARMs adjust and before their interest rates increase."
Where to seek help
Here are some places where homeowners struggling to make mortgage payments can turn to for help or further referrals:
• Lifeline Refinance Mortgage Program
A state program that provides refinancing. http://www.dhcd.state.md.us/Lifeline/ 877-462-7555
• St. Ambrose Housing Aid Center Inc.
Offers free counseling and referrals http://www.stambros.org/ 410-366-8550
• Neighborhood Housing Services of Baltimore
Provides emergency loans. It expects to have new funding available for refinancings in October. 410-327-1200
• Neighborhood Assistance Corp. of America
Offers a refinancing program and homeownership counseling. https://www.naca.com/index_main.jsp 410-783-0465
• Maryland attorney general's office
List of foreclosure counseling services http://www.oag.state.md.us/Consumer/foreclose.htm
• Homeownership Preservation Foundation
Hotline for homeowners in danger of facing foreclosure to connect with a U.S. government-approved counselor. Call 888-995-HOPE (4673). (baltimoresun.com)
Home sales slump in Md.
21.1% fewer sold in spring; prices in area hold up
Maryland's housing market took a beating in the spring selling season, recording one of the biggest drops in sales in the nation.
Homeowners in the state sold 21.1 percent fewer homes during the second quarter than they did a year earlier, the National Association of Realtors said yesterday. That was nearly double the 10.8 percent drop for the nation as a whole. The numbers, which track existing homes, are annualized and adjusted for seasonal variations.
Despite the steep sales decline, pricing in the Baltimore metropolitan area held up. The median price of a single-family home gained 3 percent in the April-June quarter over the same three months a year earlier, according to the association. Nationally, prices fell 1.5 percent.
The slump in sales in the April-June period preceded the current turmoil in the mortgage industry, which was ignited by failures in subprime loans made to buyers with shakier credit. Now, as foreclosures mount and more lenders go out of business, it has become harder to qualify for a mortgage, narrowing the pool of potential buyers.
That's a sharp contrast to what happened during the housing boom, when relaxed lending standards and the proliferation of adjustable-rate, interest-only and other nontraditional loans led to rising sales and prices.
"All of us were on a nice bubble, and everybody was waiting for that bubble to fizzle," said Thomas C. Shaner, executive director of the Maryland Association of Mortgage Brokers. "Well, it popped."
Lawrence Yun, senior economist with the National Association of Realtors, thinks prices in the Baltimore area are holding up because the economy continues to create high-paying jobs.
"There's not a panic in the market," agreed John McClain, senior fellow at the Center for Regional Analysis at George Mason University. "There are still people out there who need to live here because we still have job growth."
But sales might be better if prices were dropping.
Maryland home prices doubled from 2000 to 2005, an unusually big gain even for the U.S. boom years. Incomes didn't rise nearly as fast. With half the homes now selling for more than $325,000, some would-be buyers just can't make the numbers work.
"Affordability has been eroded," said Celia Chen, director of housing economics for Moody's Economy.com. "If prices are not falling off, that's going to constrain sales."
She thinks the local housing market probably won't improve until the middle of next year, and that's assuming no more nasty surprises.
"Conditions can easily become much worse than we expect because of all the issues arising right now in the mortgage markets and financial markets," Chen said.
Only Florida, Nevada, Arizona and Tennessee saw bigger decreases in second-quarter sales than Maryland. Florida - a state that, like Maryland, recorded some of the biggest price increases in the country during the housing boom - had a 41 percent slump in sales.
In all, 41 states plus the District of Columbia recorded declines.
Maryland's annualized sales pace in the second quarter was just under 93,000 home sales, compared with about 118,000 the same time last year, the National Association of Realtors said.
Existing homes aren't the only part of the market feeling the pinch. The National Association of Home Builders said yesterday that its index of builder confidence for August fell to its lowest level since the recessionary days of January 1991. Builders say the credit crunch is causing problems not only for borrowers with shaky credit but also for prospective buyers who need "jumbo" loans of more than $417,000.
It's hardly helpful for expensive markets such as Howard County. Nearly half the existing homes in Howard are selling for more than that price, let alone the big new homes.
"That's a scary thought," said Pat Hiban, an associate broker at the Pat Hiban Real Estate Group with Keller Williams Realty in Ellicott City. With interest rates on jumbo loans rising, some would-be buyers are reconsidering whether to purchase a home, he said.
Yun said mortgage troubles will hold back demand during the short term. But he said the subprime bust has propelled buyers with less-than-perfect credit back to loans insured by the Federal Housing Administration, a segment of the financing market that was all but abandoned during the go-go days of the boom.
He expects small gains in prices in the Baltimore area in the near future.
Yun noted signs of nationwide improvement in prices during the second quarter with 97 metropolitan areas out of 149 showing year-over-year gains in price, up from 83 in the first quarter and 68 in the fourth quarter of last year.
But Chen thinks some of the second-quarter increases were artificially high. Median prices might have been skewed upward by a drop-off in sales of cheaper homes, she said, because the subprime market was in trouble before interest rates rose for jumbo loans.
"The lower end of the housing market is falling off quickly, more quickly, because of all the problems of the subprime lending market," Chen said.(baltimoresun.com)
Maryland's housing market took a beating in the spring selling season, recording one of the biggest drops in sales in the nation.
Homeowners in the state sold 21.1 percent fewer homes during the second quarter than they did a year earlier, the National Association of Realtors said yesterday. That was nearly double the 10.8 percent drop for the nation as a whole. The numbers, which track existing homes, are annualized and adjusted for seasonal variations.
Despite the steep sales decline, pricing in the Baltimore metropolitan area held up. The median price of a single-family home gained 3 percent in the April-June quarter over the same three months a year earlier, according to the association. Nationally, prices fell 1.5 percent.
The slump in sales in the April-June period preceded the current turmoil in the mortgage industry, which was ignited by failures in subprime loans made to buyers with shakier credit. Now, as foreclosures mount and more lenders go out of business, it has become harder to qualify for a mortgage, narrowing the pool of potential buyers.
That's a sharp contrast to what happened during the housing boom, when relaxed lending standards and the proliferation of adjustable-rate, interest-only and other nontraditional loans led to rising sales and prices.
"All of us were on a nice bubble, and everybody was waiting for that bubble to fizzle," said Thomas C. Shaner, executive director of the Maryland Association of Mortgage Brokers. "Well, it popped."
Lawrence Yun, senior economist with the National Association of Realtors, thinks prices in the Baltimore area are holding up because the economy continues to create high-paying jobs.
"There's not a panic in the market," agreed John McClain, senior fellow at the Center for Regional Analysis at George Mason University. "There are still people out there who need to live here because we still have job growth."
But sales might be better if prices were dropping.
Maryland home prices doubled from 2000 to 2005, an unusually big gain even for the U.S. boom years. Incomes didn't rise nearly as fast. With half the homes now selling for more than $325,000, some would-be buyers just can't make the numbers work.
"Affordability has been eroded," said Celia Chen, director of housing economics for Moody's Economy.com. "If prices are not falling off, that's going to constrain sales."
She thinks the local housing market probably won't improve until the middle of next year, and that's assuming no more nasty surprises.
"Conditions can easily become much worse than we expect because of all the issues arising right now in the mortgage markets and financial markets," Chen said.
Only Florida, Nevada, Arizona and Tennessee saw bigger decreases in second-quarter sales than Maryland. Florida - a state that, like Maryland, recorded some of the biggest price increases in the country during the housing boom - had a 41 percent slump in sales.
In all, 41 states plus the District of Columbia recorded declines.
Maryland's annualized sales pace in the second quarter was just under 93,000 home sales, compared with about 118,000 the same time last year, the National Association of Realtors said.
Existing homes aren't the only part of the market feeling the pinch. The National Association of Home Builders said yesterday that its index of builder confidence for August fell to its lowest level since the recessionary days of January 1991. Builders say the credit crunch is causing problems not only for borrowers with shaky credit but also for prospective buyers who need "jumbo" loans of more than $417,000.
It's hardly helpful for expensive markets such as Howard County. Nearly half the existing homes in Howard are selling for more than that price, let alone the big new homes.
"That's a scary thought," said Pat Hiban, an associate broker at the Pat Hiban Real Estate Group with Keller Williams Realty in Ellicott City. With interest rates on jumbo loans rising, some would-be buyers are reconsidering whether to purchase a home, he said.
Yun said mortgage troubles will hold back demand during the short term. But he said the subprime bust has propelled buyers with less-than-perfect credit back to loans insured by the Federal Housing Administration, a segment of the financing market that was all but abandoned during the go-go days of the boom.
He expects small gains in prices in the Baltimore area in the near future.
Yun noted signs of nationwide improvement in prices during the second quarter with 97 metropolitan areas out of 149 showing year-over-year gains in price, up from 83 in the first quarter and 68 in the fourth quarter of last year.
But Chen thinks some of the second-quarter increases were artificially high. Median prices might have been skewed upward by a drop-off in sales of cheaper homes, she said, because the subprime market was in trouble before interest rates rose for jumbo loans.
"The lower end of the housing market is falling off quickly, more quickly, because of all the problems of the subprime lending market," Chen said.(baltimoresun.com)
Friday, August 17, 2007
Housing needs
A recent report from the federal Department of Housing and Urban Development shows that increasing numbers of the nation's poor are spending more of their income on rent while also waiting longer for federal subsidies. The report reflects the worsening crisis in the supply of affordable housing, a shortage that is certainly being felt in Baltimore.
Steps are being taken here to deal with the problem, but far more needs to be done.
Nearly 6 million households nationwide met HUD's definition of worst-case housing needs in 2005 (the latest available data), meaning that those families and individuals made less than half of an area's median income, received no rental assistance and paid 50 percent or more of their monthly income for rent or lived in substandard housing. The number had increased by 817,000 households since HUD's last tally, in 2003, a 16 percent jump.
A bill passed recently by the House of Representatives' financial services committee could help. It would establish a National Affordable Housing Trust Fund aiming to give states and localities up to $1 billion a year to produce, rehabilitate and preserve 1.5 million housing units for low-income families in the next decade. It's a worthy idea, but it's also been on the drawing boards for several years. Congress should push for affordable-housing relief with more urgency.
In the meantime, cities like Baltimore cannot wait and need to act on their own. From 2000 to 2005, housing prices in the city doubled while wages increased only 19 percent (a disturbing trend reflected nationwide in the HUD report). A 2005 analysis of the rental market found a shortfall of nearly 26,000 affordable units for households making less than half of the area median income, and nearly 45,000 units for households making less than 80 percent of area median income.
The City Council has passed an inclusionary zoning law that requires developers receiving large city subsidies to set aside 20 percent of units for affordable housing. It has also created an affordable-housing fund, putting in nearly $60 million over multiple years to increase the supply of affordable units. Still needed is a more comprehensive and coherent plan that should include even more investment of city dollars and a greater commitment to develop and restore more affordable units as well as provide more housing vouchers for low-income families.
Baltimore has taken some important steps, and for the next fiscal year the city is slated to get some additional federal funding. But a long-term shortfall in federal housing dollars also needs to be reversed, so that Baltimore and other cities don't have to run so much harder and faster to get ahead of the affordable-housing crisis. (baltimoresun.com)
Steps are being taken here to deal with the problem, but far more needs to be done.
Nearly 6 million households nationwide met HUD's definition of worst-case housing needs in 2005 (the latest available data), meaning that those families and individuals made less than half of an area's median income, received no rental assistance and paid 50 percent or more of their monthly income for rent or lived in substandard housing. The number had increased by 817,000 households since HUD's last tally, in 2003, a 16 percent jump.
A bill passed recently by the House of Representatives' financial services committee could help. It would establish a National Affordable Housing Trust Fund aiming to give states and localities up to $1 billion a year to produce, rehabilitate and preserve 1.5 million housing units for low-income families in the next decade. It's a worthy idea, but it's also been on the drawing boards for several years. Congress should push for affordable-housing relief with more urgency.
In the meantime, cities like Baltimore cannot wait and need to act on their own. From 2000 to 2005, housing prices in the city doubled while wages increased only 19 percent (a disturbing trend reflected nationwide in the HUD report). A 2005 analysis of the rental market found a shortfall of nearly 26,000 affordable units for households making less than half of the area median income, and nearly 45,000 units for households making less than 80 percent of area median income.
The City Council has passed an inclusionary zoning law that requires developers receiving large city subsidies to set aside 20 percent of units for affordable housing. It has also created an affordable-housing fund, putting in nearly $60 million over multiple years to increase the supply of affordable units. Still needed is a more comprehensive and coherent plan that should include even more investment of city dollars and a greater commitment to develop and restore more affordable units as well as provide more housing vouchers for low-income families.
Baltimore has taken some important steps, and for the next fiscal year the city is slated to get some additional federal funding. But a long-term shortfall in federal housing dollars also needs to be reversed, so that Baltimore and other cities don't have to run so much harder and faster to get ahead of the affordable-housing crisis. (baltimoresun.com)
Thursday, August 16, 2007
Md. mortgage program thriving
Nearly 4,000 turned to the state last year for $767 million in low-interest home loans.
Here's a mortgage program that's not in trouble.
Nearly 4,000 homebuyers turned to the state for their home loans last fiscal year, a record for Maryland's 28-year-old loan program at a time of increasing disarray in the mortgage industry.
The state made about $767 million in low-interest loans to buyers, almost all of them purchasing their first home, in the 12 months that ended June 30. That's three-and-a-half times the amount it lent the previous fiscal year - and far above the $269 million record set in the 1995 fiscal year.
Stephen D. Silver, the state Department of Housing and Community Development's chief financial officer, credits timing for the big jump in demand.
The state expanded its "More House 4 Less" offerings a few years ago from a single product to several - 30-, 35- and 40-year mortgages including interest-only loans - but word filtered out slowly.
Meanwhile, first-time homebuyers found their private mortgage options shrinking this year as foreclosures rose and lenders, stung, backed away from borrowers with shaky credit or little money to put down.
"I'm sure we are picking up some people that were being steered toward subprime," said Silver, referring to loans aimed at borrowers with credit problems.
Thus far, the state has fewer delinquent loans than do lenders with mortgages in Maryland insured by the Federal Housing Administration, the state housing and community development agency said.
The state's loans have below-average interest rates - about 6 percent last fiscal year while the market rate was closer to 6.5 percent. Borrowers are also eligible for assistance with down payment and closing costs.
The products are all fixed rate. "We wanted to make sure our borrowers were getting something with no surprises," Silver said.
The state made 3,882 loans last fiscal year, triple the number a year earlier. Though that's a fraction of all new loans, it's a hefty increase at a time of slumping home sales.
Home values, which remain high, are part of the reason homebuyers would flock to a program that offers down payment and closing-cost help. Many first-time buyers are hard pressed to put even 5 percent down. With average sales prices in Maryland at $380,000, a 5 percent down payment would equal $19,000.
Ryan W. James, senior mortgage banker with First Horizon Home Loans in Timonium, said the More House 4 Less loans - sometimes called "CDA" because they're handled by the state's Community Development Administration - have grown in popularity as the state made it easier and quicker to get one.
"CDA had a bad reputation for a long time," said James, who said he now does 10 to 15 of the loans a month and said the processing time is much faster than it once was. "What took weeks with CDA now takes days. ... That helped a lot."
The average More House 4 Less borrower got a loan equaling 99 percent of the value of the home. Nine out of 10 participants got down payment assistance, closing-cost help or both from the state.
Borrowers had to be buying either for the first time or in targeted areas, such as Baltimore City. The average borrower had a household income of about $55,000 and purchased a home priced at almost $200,000.
The state housing agency, which finances its loans with mortgage revenue bonds, said it hasn't run into trouble getting money as investors abandon other parts of the mortgage market. Silver figures that's because the bonds are rated AA and are mostly tax-exempt, and because all the mortgages the state approves have either private or government insurance. (baltimoresun.com)
Here's a mortgage program that's not in trouble.
Nearly 4,000 homebuyers turned to the state for their home loans last fiscal year, a record for Maryland's 28-year-old loan program at a time of increasing disarray in the mortgage industry.
The state made about $767 million in low-interest loans to buyers, almost all of them purchasing their first home, in the 12 months that ended June 30. That's three-and-a-half times the amount it lent the previous fiscal year - and far above the $269 million record set in the 1995 fiscal year.
Stephen D. Silver, the state Department of Housing and Community Development's chief financial officer, credits timing for the big jump in demand.
The state expanded its "More House 4 Less" offerings a few years ago from a single product to several - 30-, 35- and 40-year mortgages including interest-only loans - but word filtered out slowly.
Meanwhile, first-time homebuyers found their private mortgage options shrinking this year as foreclosures rose and lenders, stung, backed away from borrowers with shaky credit or little money to put down.
"I'm sure we are picking up some people that were being steered toward subprime," said Silver, referring to loans aimed at borrowers with credit problems.
Thus far, the state has fewer delinquent loans than do lenders with mortgages in Maryland insured by the Federal Housing Administration, the state housing and community development agency said.
The state's loans have below-average interest rates - about 6 percent last fiscal year while the market rate was closer to 6.5 percent. Borrowers are also eligible for assistance with down payment and closing costs.
The products are all fixed rate. "We wanted to make sure our borrowers were getting something with no surprises," Silver said.
The state made 3,882 loans last fiscal year, triple the number a year earlier. Though that's a fraction of all new loans, it's a hefty increase at a time of slumping home sales.
Home values, which remain high, are part of the reason homebuyers would flock to a program that offers down payment and closing-cost help. Many first-time buyers are hard pressed to put even 5 percent down. With average sales prices in Maryland at $380,000, a 5 percent down payment would equal $19,000.
Ryan W. James, senior mortgage banker with First Horizon Home Loans in Timonium, said the More House 4 Less loans - sometimes called "CDA" because they're handled by the state's Community Development Administration - have grown in popularity as the state made it easier and quicker to get one.
"CDA had a bad reputation for a long time," said James, who said he now does 10 to 15 of the loans a month and said the processing time is much faster than it once was. "What took weeks with CDA now takes days. ... That helped a lot."
The average More House 4 Less borrower got a loan equaling 99 percent of the value of the home. Nine out of 10 participants got down payment assistance, closing-cost help or both from the state.
Borrowers had to be buying either for the first time or in targeted areas, such as Baltimore City. The average borrower had a household income of about $55,000 and purchased a home priced at almost $200,000.
The state housing agency, which finances its loans with mortgage revenue bonds, said it hasn't run into trouble getting money as investors abandon other parts of the mortgage market. Silver figures that's because the bonds are rated AA and are mostly tax-exempt, and because all the mortgages the state approves have either private or government insurance. (baltimoresun.com)
Wednesday, August 15, 2007
Jury awards $4 million in lead case
Damages could be reduced under state-cap law, attorney for city housing authority says.
A city jury has found that the Housing Authority of Baltimore City should pay $4 million in damages to two siblings poisoned by lead paint in their publicly owned rowhouse in the 1980s.
The verdict - issued Thursday - directed $2.5 million to Joseph Avery Jr., 23, of the 3000 block of Rosedale Court and $1.5 million to his sister, Lisa Avery, 21, of the 1700 block of McCulloh St.
The family filed suit against the housing authority in 2005.
The damages could be reduced to a maximum of $350,000 for each sibling under the state payment caps in place at the time they were tested for lead poisoning, said J. Marks Moore III, the attorney for the housing authority's insurance company. The city may appeal the verdict.
But Bruce H. Powell, the Averys' attorney, said he plans on challenging the state cap in a post-trial hearing Aug. 29.
"You have a right to a jury trial, and you have a right to what the jury awards you," Powell said. "The jury thought that they were compensating these people in a way that was fair, and that's not the case."
Lead poisoning, which often occurs when children ingest chipped household paint, can cause mental problems, including cognitive deficits and aggressive behavior.
At the four-day trial, a vocational rehabilitation expert testified that the Avery siblings show symptoms of lead poisoning. Both were in special education, and neither earned a high school diploma.
Last year, 1,274 children in Maryland had lead poisoning, according to statistics from the Maryland Department of the Environment.
That figure includes 936 newly reported cases, 573 of which occurred in Baltimore.
As more research has emerged highlighting effects of lead poisoning, the amount in damages paid by property owners has increased, Moore said.
Since the early 1990s, Moore has handled at least 200 lead poisoning cases for the housing authority, with 10 reaching trial. When he started, a typical verdict ordered $200,000 in damage payments, he said.
"Now, you see just about all of them in the millions," he said. "They really don't have a basis in relation to the underlying facts of the case. I think they're excessive."
The housing authority deferred questions about its lead poisoning cases to Moore.
Ruth Ann Norton, executive director of Baltimore's Coalition to End Childhood Lead Poisoning, said that most current cases of childhood lead poisoning can be blamed on private landlords rather than public housing.
Many city houses built through the 1950s included lead paint. Since it was banned nationwide in 1978, the city has worked to repair lead-tainted houses it owns and reach out to poisoned children, Norton said.
"There has been much progress made there in the intervening 20 years, and so a child living in city-owned housing today would have hopefully a much different experience," she said.
The Averys' mother, Trina Ashley, moved into a Gilmor Homes rowhouse on Bakbury Court in 1984, shortly before giving birth to Joseph. The housing authority had built the home in 1940 with specifications that indicated that lead paint was used.
While living in the home, Ashley repeatedly complained about flaking lead paint, Powell said. In 1986 and 1987, the children were tested for lead and found to have levels that were acceptable at the time but later considered poisonous by Centers for Disease Control and Prevention standards.
In 1988, the Health Department tested the home for chipped lead paint and found it in five locations.
The only location where the lead concentration exceeded acceptable amounts was the front door, and whether the now-deceased surveyor's report indicated lead had been found in the other locations was a trial issue.
A month after the house was tested, the family moved. (baltimoresun.com)
A city jury has found that the Housing Authority of Baltimore City should pay $4 million in damages to two siblings poisoned by lead paint in their publicly owned rowhouse in the 1980s.
The verdict - issued Thursday - directed $2.5 million to Joseph Avery Jr., 23, of the 3000 block of Rosedale Court and $1.5 million to his sister, Lisa Avery, 21, of the 1700 block of McCulloh St.
The family filed suit against the housing authority in 2005.
The damages could be reduced to a maximum of $350,000 for each sibling under the state payment caps in place at the time they were tested for lead poisoning, said J. Marks Moore III, the attorney for the housing authority's insurance company. The city may appeal the verdict.
But Bruce H. Powell, the Averys' attorney, said he plans on challenging the state cap in a post-trial hearing Aug. 29.
"You have a right to a jury trial, and you have a right to what the jury awards you," Powell said. "The jury thought that they were compensating these people in a way that was fair, and that's not the case."
Lead poisoning, which often occurs when children ingest chipped household paint, can cause mental problems, including cognitive deficits and aggressive behavior.
At the four-day trial, a vocational rehabilitation expert testified that the Avery siblings show symptoms of lead poisoning. Both were in special education, and neither earned a high school diploma.
Last year, 1,274 children in Maryland had lead poisoning, according to statistics from the Maryland Department of the Environment.
That figure includes 936 newly reported cases, 573 of which occurred in Baltimore.
As more research has emerged highlighting effects of lead poisoning, the amount in damages paid by property owners has increased, Moore said.
Since the early 1990s, Moore has handled at least 200 lead poisoning cases for the housing authority, with 10 reaching trial. When he started, a typical verdict ordered $200,000 in damage payments, he said.
"Now, you see just about all of them in the millions," he said. "They really don't have a basis in relation to the underlying facts of the case. I think they're excessive."
The housing authority deferred questions about its lead poisoning cases to Moore.
Ruth Ann Norton, executive director of Baltimore's Coalition to End Childhood Lead Poisoning, said that most current cases of childhood lead poisoning can be blamed on private landlords rather than public housing.
Many city houses built through the 1950s included lead paint. Since it was banned nationwide in 1978, the city has worked to repair lead-tainted houses it owns and reach out to poisoned children, Norton said.
"There has been much progress made there in the intervening 20 years, and so a child living in city-owned housing today would have hopefully a much different experience," she said.
The Averys' mother, Trina Ashley, moved into a Gilmor Homes rowhouse on Bakbury Court in 1984, shortly before giving birth to Joseph. The housing authority had built the home in 1940 with specifications that indicated that lead paint was used.
While living in the home, Ashley repeatedly complained about flaking lead paint, Powell said. In 1986 and 1987, the children were tested for lead and found to have levels that were acceptable at the time but later considered poisonous by Centers for Disease Control and Prevention standards.
In 1988, the Health Department tested the home for chipped lead paint and found it in five locations.
The only location where the lead concentration exceeded acceptable amounts was the front door, and whether the now-deceased surveyor's report indicated lead had been found in the other locations was a trial issue.
A month after the house was tested, the family moved. (baltimoresun.com)
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