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)

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)

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)

Unsold homes swell to record in region

Stacey Wooden and her husband, David Schreiber, have had their Mount Washington home on the market for four months. The couple initially listed their home for $769,000 but eventually dropped the price by almost $70,000.

Home prices flattened in July in metropolitan Baltimore, as unsold houses swelled to a record and buyers faced tightening credit from a distressed mortgage industry.

The average price of a home in the region rose less than half a percent to $331,053 last month from $329,855 in July 2006, according to Metropolitan Regional Information Systems Inc., a Rockville multiple-listing service.

Average prices rose as much as 4.2 percent in Carroll County and 3.5 percent in Baltimore City, but were down slightly in Anne Arundel, Baltimore and Harford counties and flat in Howard County.

As the number of homes on the market mounted, buyers were being forced to cut prices to make a sale happen.

At the same time, buyers - some with good credit - are finding their home loan options more limited as lenders pull back in light of problems in the subprime market.

"The pool of buyers has been shrinking," said Gail Feirstein, an agent with Coldwell Banker in the Annapolis Plaza office. "The mortgage market has created more of a gap for buyers who want to buy a house. Programs with 100 percent financing are on hold right now, and first-time homebuyers have to stretch more. That makes the whole move up market more difficult."

Earlier this week, a report by the National Association of Realtors predicted that home sales nationally likely will fall 6.8 percent to 6.04 million this year, a five-year low.

"Mortgage disruptions will hold back sales over the short term, but long-term fundamentals are favorable," with a modest upturn expected by the end of the year, predicted Lawrence Yun, a senior economist with the Realtor's association, in the report.

Prices have been falling across the nation, said Celia Chen, director of housing economics for Moody's Economy.com.

"Baltimore prices are holding up a little better," she said. "There's certainly weakness all over the country. It's getting more difficult to get financing for homes, particularly for those buyers who don't have very good credit ratings. The subprime segment has obviously collapsed, and very few lenders are now originating loans for subprime borrowers."

Subprime loans are made at higher interest rates to borrowers with poor credit.

"The fact that fewer of those mortgages are being written is behind, in large part, the declining number of sales of homes," Chen said.

Though prices barely budged from a year earlier in metropolitan Baltimore, the number of home sales has been sliding by double digits each month since April.

The number of homes sold in Baltimore and the five surrounding counties fell 12.36 percent to 2,921 in July, compared with 3,333 homes in July 2006, said MRIS, the multiple-listing service.

With listings at a record 19,985, homes took an average of 80 days to sell, compared with an average of 55 days in July 2006 when inventory was 16,749, the statistics showed.

Some price ranges are faring better than others, real estate agents said. High-end suburban houses - $3 million and up - are selling well, sometimes even within a month, said Marc Witman, a partner at Yerman Witman Gaines & Garceau Realty.

But Baltimore's downtown housing market has an abundance of homes in the $300,000 to $500,000 price range.

"There is such a supply of housing in that price range, they all start to run together," Witman said. "Buyers are becoming more deliberate and are taking their time to select the properties they want to view because there are just so many, and you don't have time to go through them all."

To compete, sellers are having to rethink asking prices and stay on top of repairs and maintenance, real estate agents said.

"Some houses have been on the market for so long that people have lost interest in keeping them up," said Tina Marine, an agent with Coldwell Banker in Annapolis. "They're grungy. The beds get stopped being made. ... People just give up."

David Schreiber and Stacey Wooden are not giving up on selling their renovated, five-bedroom, century-old house in Mount Washington. The family plans to relocate to the Chapel Hill-Durham-Raleigh, N.C., triangle for his job, which has an office in Raleigh.

They have cut their initial price of $769,000, set in April, twice to its current $699,999. The couple had hoped to move over the summer to enroll their two sons in school in North Carolina by fall. But despite several open houses, they have had just one offer.

"We're trying to be pragmatic about things," Schreiber said. "There don't seem to be a lot of variables we have control over in the housing market." (baltimoresun.com)

Reversal of fortune

As European banks scrambled last week to curtail the widening repercussions of the U.S. subprime mortgage mess and deal with a threatened liquidity crunch, discussion turned to whether the Federal Reserve Board would bail out investors caught up in the crisis. The boomerang effect of Americans' reliance on subprime mortgages can't be underestimated, but efforts to manage the fallout should not lose sight of those in danger of losing their homes.

Until last week, the subprime crisis was marked by a cascade of failing lenders, delinquent loans and foreclosures. And then a French bank stopped withdrawals from three investment funds ensnared by the subprime crisis. That triggered Europe's central bank and the Federal Reserve to pump billions into the banking systems to keep credit available as U.S. stocks plummeted.

Whether the actions by the central banks quell concerns or exacerbate the situation will become clear soon enough.

But even if the liquidity crunch eases and the financial markets correct themselves, the collapse of the subprime market will continue to be felt across the country as jobs are lost, loans are tougher to get and homeowners struggle to keep their houses. Experts predict that autumn will bring another wave of delinquencies and foreclosures as the next level of subprime mortgages resets. The effort, at least locally, must remain on attempts to shore up the housing market.

In Maryland alone last week, American Home Mortgage Investment Corp. laid off hundreds of employees in the state while seeking bankruptcy protection; Fieldstone Investment Corp. of Columbia, a subprime lender, quit taking loan applications; and state Licensing Secretary Thomas E. Perez announced the first prosecution of a "foreclosure rescue scam," evidence that criminals are exploiting homeowners' woes.

To keep homeownership available for low-income buyers, regulators must ensure that lending practices are reasonable and realistic. New guidelines issued by the Federal Reserve say loans should be made based on a borrower's ability to pay the entire cost of the loan, not a lower-priced introductory rate - but they are only guidelines.

The increasing rate of home foreclosures is leaving cities such as Baltimore, Cleveland and Riverside, Calif., with a growing vacancy problem. Urban Institute scholar Edward M. Gramlich offers this remedy: State and local governments should invest in the newly vacated homes to address a shortage of rental and affordable housing. That's one way to reap some benefit from a housing bubble gone bust. (baltimoresun.com)

Home prices up, but sales slump may linger

The real estate slump in Baltimore County could drag through 2008 and pull more house prices down with it, local market-watchers warn.

The number of houses sold across the county this June fell 17 percent below sales in June 2006, according to statistics released by Metropolitan Regional Information Systems, a Rockville firm that tracks real estate sales.

The total dollar value of homes sold dropped 14 percent below June 2006 sales while the time it took to sell a house jumped 71 percent from 42 days to 72 days, the firm reported.

The average price of houses sold in Baltimore County, however, increased 3.5 percent to $326,744.

But county real estate agents warn buyers not to hang their hopes on that thin, silver lining. Around the county, some house prices have already dropped.

Prices in northwest Baltimore County have been flat since last summer and now "prices definitely are coming down, but they're not plunging," said Nnaemeka Chima, broker with the Pikesville-based real estate company Chima Group. The average time to sell a house in the northwestern part of the county, he added, now tops three months.

Marc Witman, a former president of the Greater Baltimore Board of Realtors and a principle with Yerman Witman Gaines & Garceau Realty in Baltimore, said he sees particular weakness in Pikesville and Owings Mills, where a large inventory of houses is on the market and many of those houses are similar or nearly identical.

It's a dilemma with which Owings Mills homeowner Jonathan Redley is all too familiar.

When he put his Pleasant Walk town house in Owings Mills on the market April 1, Redley knew not to anticipate a quick sale. But he wasn't expecting to go four full months without a single offer.

"The house shows beautifully. We get great compliments after every showing and we have two to three showings every week," he said.

Redley and his wife have cut their asking price from $265,000 to $260,000, sweetened the pot with a home warranty and are now considering offering to cover some of the buyer's closing costs. But there are six other nearly identical town houses up for sale in Pleasant Walk and dozens more town houses on the market just in Owings Mills.

"So buyers can afford to be very choosy," Redley said.

Sometimes a buyer's choice, he said, is determined by such fine points as which house has the nicer bathtub.

Across the county, more than 4,200 homes were up for sale at the end of June.

Several factors have created a tougher market for house sellers. Double-digit price hikes in recent years placed many houses outside the average buyer's price range. Meanwhile, this year's wave of foreclosures has prompted some lending institutions to stop offering subprime mortgages and other unconventional loans that had enabled moderate-income buyers to purchase a house.

Those factors could force more sellers to trim their asking price, Chima and Witman said.

"This is economics 101. Sellers for the most part have not yet gotten the idea that they need to be more price-sensitive because buyers are very much more price-sensitive and value-oriented than they have been in the last few years," Witman said.

Many sellers are having difficulty realizing they can't follow a recent practice of pricing their house several thousand dollars above the most recent sale in the neighborhood, Chima said.

"It can be very humbling when you realize the boom is over and you've missed it," he said.

Chima says the region's current real estate market is a normal, stable market. Unique and top-quality houses are still selling quickly for high prices. Chima added, however, that he doesn't expect to see prices rise again until the summer of 2009.

But Redley said there is an upside to the current market.

When Redley and his wife bought their Pleasant Walk town house in the hot market of 2005, they had to jump at the opportunity and offer above asking price to beat out competing bidders.

Now the couple, who are expecting their first baby, are shopping for a single-family home. They've found three or four Owings Mills houses they like, and those properties aren't selling either. So when they're ready to make an offer, Redley said, he expects he'll be able to go back to the same homes and have the luxury of negotiating a good price. (owingsmillstimes.com)

Slowdown Offers a Chance to Get Real About Home Sizes

Will the deflating housing market motivate U.S. home buyers to deflate their housing aspirations, to get real not only about what they can afford but also about how much space they need?

Maybe buyers will realize that good design and quality construction ultimately will prove more worthwhile than square footage.

For years, the building industry has produced bigger and bigger homes. Consumer expectations, easy credit and greater profit potential have resulted in new houses with more rooms, larger garages, increased volume and, of course, higher price tags.

Consumers, after all, seek to consume. Why settle for three bedrooms, two baths and a one-car garage? Why not opt for a kitchen big enough to entertain several guests and roast two turkeys at once? Why wouldn't someone want a house with a separate room for every function? How can anyone live without a dedicated audio-video entertainment space, multiple walk-in closets and a master bathroom larger than the rarely used dining room?

Today's housing-market paradox is that while houses have been expanding, households have been shrinking. In suburban houses built during recent decades, fewer people occupy more space.

This trend's lack of sustainability seems to finally be apparent.

Some homes also lack quality and durability. Production houses with more than ample square footage are sometimes cheaply built, have awkward floor plans, suffer from overly complex three-dimensional geometry, and boast too many materials and motifs. How many overlapping gables, neoclassical cornices, false dormers and useless shutters does a house need?

Such homes are not dysfunctional or unsafe. But the construction products may be the least costly; may feel and look inexpensive; and may require maintenance, repair or replacement more frequently.

There are lots of opportunities to compromise quality in designing and building a house. Windows and doors are favorite cost-saving targets. Interior finishes and accessories -- decorative trim and hardware, cabinets, floors, lights -- are also fruitful targets.

Among the most important components of any building, windows provide daylight and views to the outside, keep out the weather, and resist heat gain and loss. Yet the quality, cost and performance range of windows is vast.

For example, windows may be double-glazed but lack energy-efficient, low-emissivity glass and an insulating cavity filled with inert gas. The window frame and sash may be thin vinyl that is easily deformed, rather than aluminum or aluminum-clad wood. The movable sash may not move very smoothly.

If interior doors are not solid-core with robust hardware and a well-aligned frame, they can feel flimsy, shut or latch poorly, and do little to stop noise or fire.

Fortunately, the structural framing, water and waste piping, and electrical systems of new homes usually perform reasonably well, thanks to stringent building codes. Sheet-metal ductwork and mechanical equipment to heat and cool newly built homes also may be fairly reliable, assuming they have been properly engineered and installed.

Today, with dramatic increases in mortgage foreclosures, tightening loan standards, and ever-rising costs of land and construction, many home buyers and home builders will have to alter their behavior.

Attitudes about homes need to shift away from quantity and toward quality. Downsizing should be the new upscaling.

Buyers should demand well-built and long-lasting but modestly sized houses -- 2,000, 2,500 or 3,000 square feet -- instead of ostentatious but cheaply built 5,000- or 6,000-square-foot houses.

Smaller homes will be more affordable, more durable and, not incidentally, a lot easier to keep clean. With good design, they also will be more attractive. (Washington Post)

Overcrowding in Frederick: Experts look into causes for illegal rooming houses

Experts agree a combination of economic, social, legal and cultural factors contributes to overcrowded housing in Frederick. That may be part of the reason the city's code enforcement office has experienced an increase in complaints about overcrowded dwellings.

Last week, city code enforcers condemned 5712 Butterfly Lane. The inspectors also served six cease-and-desist orders on properties scattered around the city that have been illegally converted from single-family dwellings into rooming houses.

Peter Zamora works as the regional counsel in Washington for the Mexican American Legal Defense and Education Fund. The organization works to advocate for and protect the rights of the more than 45 million Hispanics in the U.S.

Zamora believes the lack of immigration reform at the federal level has led some local governments to use regulations to target immigrants.

He points to a recent measure in Prince William County, Va., that denies undocumented immigrants access to community services, such as health care and education. It authorizes county workers to verify the immigration status of anyone on whom a reasonable suspicion exists.

"Certainly, a local community has the ability to put in place health and safety regulations — if it's addressing a real concern, it can be legitimate," Zamora said. "But often we have seen something that has been framed as health- and safety-related that has another purpose."

Is immigration the issue?

Mike Blank, the city's code enforcement manager, said last week's inspections and orders have nothing to do with immigration — the properties were either illegally converted or endangered residents' safety.

"Our office could care less if there are legal or illegal immigrants living in these properties — that's not our concern," he said. "Even if we were looking for illegals, it wouldn't have mattered at Butterfly Lane — the owner and people living there are legal residents."

Inspectors found nine people, including four children, living in the two-bedroom residence which had been converted into an illegal rooming house.

At one time, more than a dozen people lived there, a resident said after the inspection. Occupants used eight makeshift bedrooms, a crude basement kitchen and a backyard shed converted into a living space.

Blank said the house was targeted because it received the most complaints.

While the investigation spanned about a year, last month Mayor Jeff Holtzinger authorized $30,000 for overtime needed to conclude the investigation and increase inspections on other properties.

"There is always a cost to everything, but that's not a factor here," Blank said. "Our main focus is to make sure everyone has a safe place to live in and to protect the quality of life in our community."


Causes of overcrowding

A high cost of living and rising property values top the list of reasons experts gave to explain why some people are forced to live in overcrowded conditions.

Mike Spurrier, director of the Frederick Community Action Agency, said costs rise the closer residents live to Washington. The agency provides food, shelter, medical care, housing and other forms of assistance to low-income or homeless people.

Residents in Montgomery County, between Washington, D.C., and Frederick County, pay an average of 33 percent more than the national average for living expenses, according to the Maryland Department of Business and Economic Development. It costs residents about 14 percent more than average to live in Frederick County. Washington County residents pay about average, while those in Allegany County pay about 20 percent less than average.

"Definitely, an issue of the overcrowding sits in the cost of housing — it's skyrocketing in Frederick," Spurrier said. "People tend to double up because they can't afford to live on their own."

Not having the proper documents can make it impossible for immigrants to find a place to rent, Spurrier said. That often leads to substandard or overcrowded housing, regardless of their legal status.

"You could be a legal immigrant from Russia, but have difficulty establishing a credit history," he said. "Many landlords are looking for credit reports, but immigrants don't have access to that."

Language barriers and differences in culture make things worse, he said. Even native English-speakers don't understand jargon on leases or other legal documents. Many immigrants don't have the money to hire an interpreter.

In other countries, it's common for several generations to live together in a single house.

"It's human nature for people to want to be around those they feel comfortable with," Spurrier said. "If you go to any major metro area, you'll see communities who are Irish or Cuban or Russian living in neighborhoods where they feel culturally connected to each other."


Not enough help

Jenny Short, director of Housing and Community Development for Frederick County, said the closing of public housing projects and the lack of affordable residences also contribute to overcrowding.

For years, the county has offered housing vouchers and federal rental subsidies to families who earn less than 50 percent of the median income, which was $69,005 in 2004.

More residents have applied than the county can help. Waiting lists are closed because of scarce money, Short said. That keeps the program manageable and prevents false hope.

Eileen Barnhard, the city's housing rehabilitation financial specialist, said a sluggish economy, rising cost of living and the high price of real estate also contribute to overcrowded housing. An increase in adjustable rate mortgage foreclosures made things worse.

"When you have an adjustable rate, that rate sometimes goes up every six months," she said. "People have become very marginalized using upwards of 45 percent of their income for these deals."

The rule of thumb used to be to spend about one-third of income on housing expenses, but most people spend much more, she said. The cost of living is not proportionate to people's incomes.

"It's not just the cost to buy a house that's rising, it's also the cost to live in that house — the cost of gas has doubled and tripled, electricity is rising, food prices have gone up," Barnhard said. "People are putting themselves in debt and living paycheck to paycheck trying to survive."


Housing workers

A booming job market and gentrification concern James Upchurch, director of Interfaith Housing Alliance. The alliance is the largest nonprofit affordable housing association in Frederick County.

As more jobs come to Frederick, the professionals they draw displace those in mid- to low-income households, he said. That's because houses can't be built fast enough to meet the demand.

As more high-earning residents come to Frederick, the need for service workers also rises, he said. When teachers, shopkeepers and first responders can't find a place to live, they either commute or double up.

"There is a real disconnect between the jobs that are coming here, like to Fort Detrick, and the growing needs of the community," Upchurch said. "People with lower-paying jobs are taking advantage of the jobs we want them to do, but when you don't create affordable housing, these people don't have a lot of options here in town."

Richard Yeron, director of Centro de Familia, provides social services to immigrants. He compared the living arrangements of many immigrants to those of college students -- they rent a house, divide up the living spaces and split the rent.

He described two clients, both engineers at Bechtel Corporation, who share the cost of a two-bedroom apartment.

"They can't afford to have their own housing," Yeron said. "For two Ph.D. engineers educated in this country to go through that, you can imagine what it must be like for people who don't have an education." (fredericknewspost.com)

Program to stave off foreclosures

Homeowners fearful of losing their homes because of looming defaults and foreclosures could get help through a new state initiative.

Called Homeowners Preserving Equity, the HOPE program offers a commitment of $100 million in private capital to help about 500 homeowners to refinance and switch adjustable-rate mortgages to fixed-rate mortgages.

The state also plans to use $10 million from the state's mortgage insurance program as an incentive to encourage lenders to provide another $200 million to refinance another 1,000 homeowners.

The goal is to prevent an expected wave of foreclosures due to the recent proliferation of "exotic" loans which include adjustable rate, balloon payment and negative amortization loans.

"The HOPE initiative is an innovative package of foreclosure prevention measures, combining refinancing, mortgage insurance, incentives and homeownership counseling to make sure Maryland families can preserve the equity they have built up in their homes," said Ray Skinner, secretary of the state Department of Housing and Community Development, in a statement after a June 13 press conference in Dundalk.

"It is a proactive approach to address rising foreclosure in Maryland due to sub-prime loans before it becomes a crisis," he said. "We're working to protect Marylanders' greatest asset -- their homes."

The state Department of Housing and Community Development has approved more than 40 lenders to participate in the program, including several with branches or headquarters in Baltimore County.

Included are American Home Mortgage Corp., BB&T, Bradford Bank, Capital Mortgage Finance Corp., Carrollton Bank, Chesapeake Bank of Maryland, Chevy Chase Bank, Citizens Trust Financial Group, Equitable Trust Mortgage Corp., First Equity Mortgage, First Home Mortgage, First Preference Mortgage Corp., M&T Bank and Metrocities Mortgage.

Refinancing is not the only feature of the program.

The Maryland Affordable Housing Trust, administered by the Department of Housing and Community Development, is offering $1 million in competitive grants to nonprofits that provide counseling services to homebuyers.

The one-year awards cannot exceed $100,000 per organization.

In addition, Gov. Martin O'Malley has created a task force to analyze homeownership data and also possibly recommend changes in foreclosure procedures. The task force will report to O'Malley in October before the 2008 General Assembly session begins in January.

The secretaries of the Department of Housing and Community Development and the Department of Labor, Licensing and Regulation will head the task force, which will also include representatives from the mortgage industry, state agencies and housing advocates.

As of June 21, officials had not picked the members.

For more information about the HOPE program, call 1-877-462-7555 or go to www.dhcd.state.md.us.

For complaints about lending practices, call the Department of Labor, Licensing and Regulation at 888-784-0136. (Arbutus Times)

Md. bubble economy feels chill wind from nation's credit crisis

There are still reasons to believe the housing heartache won't badly hurt the rest of the economy, but not as many as a few days ago.

Countrywide Financial Corp., which handles nearly a fifth of all U.S. mortgages, reported soaring delinquencies, falling profits and increased default risk last week. Baltimore's First Mariner Bancorp disclosed similar problems.


Sales of existing homes fell for the fourth month in a row, and more than expected. New-home sales were even worse. Homebuilders also reported worse-than-predicted results as sales plunged and assets depreciated.

And the stock market, one proxy for the larger economy, had its worst week in nearly five years.

"To this point we have not seen significant spillovers from the housing sector into other parts of the economy," Federal Reserve Chairman Ben S. Bernanke told Congress nine days ago.

Wonder what he thinks now?

Nobody expected the home and mortgage businesses to thrive anytime soon. But nobody expected Countrywide chief executive Angelo R. Mozilo to start comparing the current environment with that of the Great Depression. Nobody figured on a spike in soured loans to homeowners with good credit ratings.

Nobody expected the collapse of two New York hedge funds investing in subprime mortgages to kick up dust in Baltimore. Nobody expected a bunch of First Mariner's mortgages in Northern Virginia to go bad less than three months after they were issued.

"I've never had anything like this happen to me," First Mariner Chief Executive Officer Edwin F. Hale Sr. said last week.

This from a guy who has been wheeling and dealing for decades and became chairman of the Bank of Baltimore after it had to foreclose on 13 hotel projects in the early 1990s. Hale took control of the bank through a proxy fight and sold it before starting First Mariner.

Until very recently, economic optimists had comforted themselves with the notion that housing problems were "contained."

The biggest were confined to Florida, California and maybe a few Midwestern states, they said. Only the worst combinations of upward-adjusting interest rates and poorly qualified borrowers would cause defaults. Homebuilder stocks were still a good long-term bet.

Unemployment was still low, implying plenty of personal income to pay mortgages. Things would pick up in the spring home-buying season, people figured.

But there was no season, it is now apparent. At least not enough of one to prevent a downward spiral in states such as Nevada, Arizona, Illinois, Ohio, Indiana, Maryland and Virginia.

The salve of federal money that has protected the Baltimore-Washington region from economic pain is losing its effectiveness. Half of First Mariner's problem loans were in Northern Virginia, home of a defense-spending spree since 2001. The rest were in several other states.

First Mariner had sold the loans to New York investment house Bear Stearns Cos., but it was required to repurchase them when borrowers began missing payments. This month Bear Stearns disclosed that two of its subprime mortgage investment pools called hedge funds were all but worthless.

Hale thinks some of the mortgages may have been issued to "flippers" seeking a quick buck, violating contract terms requiring the money to be applied to a primary residence.

Even so, the delinquencies don't speak well of the Northern Virginia economy or, by implication, Maryland's, which has been operating in the same federal bubble.

Now even mortgages issued to well-qualified borrowers are at risk. The Mortgage Bankers Association had already reported an uptick in soured "prime" loans for the first quarter. Foreclosure rates in Indiana, Ohio and Michigan exceeded those in Texas during the oil bust in the 1980s, the association said.

Last week Countrywide said more borrowers with good credit records were missing payments - and not just on loans whose low "teaser" rates were adjusting upward. Some were delinquent because of unemployment, which suggests an economywide problem. And the crescendo of adjusting loans continues; plenty of three-year adjustables issued in recent years have yet to reset to market rates and ding family finances.

Homebuilder stocks are revisiting lows of last summer, and now trauma has spread across the securities spectrum.

It wasn't just most stocks that sold off last week. Corporate bonds took a header, too, which could presage a credit crunch and slower growth.

All this occurs on an economic foundation that wasn't solid to begin with. National employment growth has slowed from last year, and so has Maryland's.

The metro-Baltimore economy "has taken a sharp hit in the past six months, with job growth coming in well below the national pace thus far this year," Economy.com's Rakesh Shankar wrote recently. "This is a marked deviation from the previous five years."

It's not hopeless. The low dollar will boost U.S. exports. Interest rates should fall (it's time to start now, Chairman Bernanke), which will help. Maryland is getting tens of thousands of defense-related jobs, which will help even more. We won't see a recession.

But we will see even slower growth, and the housing industry will be the chief ball and chain. (baltimoresun.com)

Developer and four others sue Queen Anne's, claiming bias

Builder says board caused project delays, violated federal law

Six years ago, developer John C. Stamato acquired 144 acres in Grasonville with the idea of building houses, setting aside a portion for the middle class. Instead of erecting 218 homes that only a fraction of Marylanders could afford, he later proposed breaking off dozens of those units and listing them for less than $150,000 apiece.

Stamato said he spent hundreds of thousands of dollars playing by the county's development rules to build in a designated growth area.

But when the county's commissioners, under pressure to rein in growth, voted unanimously in May to indefinitely delay access to water and sewer service, he and several supporters had had enough.

Stamato has been joined in the lawsuit by two builders, including Maryland-based Enterprise Homes Inc., an arm of the Rouse-founded organization that supports affordable-housing interests across the United States. Two African-American residents who say they cannot afford to buy a home in Queen Anne's County have also signed on as plaintiffs: a United Methodist minister in Grasonville and a Denton resident who works in Annapolis.

They are seeking unspecified damages and to force the commissioners to reconsider their stance on the project, which abuts a much-disputed parcel that the state and county intend to buy for $5 million and preserve.

Midgett S. Parker Jr., an attorney representing the plaintiffs, said this case speaks to a "lack of political will to provide an adequate supply of affordable housing for the next generation."

Parker noted that while Queen Anne's County passed a 2003 law to require developers of large projects to set aside 10 percent of their units as "moderately priced," not one has been built there.

Among the allegations listed in the 22-page lawsuit, it said that Gene M. Ransom III, one of Queen Anne's County's commissioners, voiced "concern" that the affordable housing would be near his home.

Eric S. Wargotz, president of the board of commissioners, declined to comment last night because he had not seen the lawsuit. Fellow commissioners Courtney M. Billups, Paul L. Gunther, Carol R. Fordonsky and Ransom did not return calls for comment yesterday.

Anti-growth sentiment is high in Queen Anne's, where voters ousted three incumbents last year, and three others in 2002, over the issue. Since 1999, the county has granted no more than 440 permits a year for new homes on vacant lots. That number dropped to 163 in 2005 and 146 in 2006. Based on numbers from the first five months of 2007, the county is on pace to approve 103 permits for such housing.

Legal and housing experts in the state said they were unaware of similar legal action brought elsewhere against a municipality in Maryland and said the plaintiffs' argument is an unusual twist on how federal housing rules are enforced. Government officials typically rely on the rules to bring action against developers who illegally discriminate against prospective homeowners and renters, they said.

"I think it's a fairly novel idea, and it's about time," said Barbara Bezdek, a professor of law at the University of Maryland who has raised such a theory in class.

Housing experts accuse many local governments of dragging their feet on aggressive affordable-housing initiatives, and they expect more cases brought by developers and residents against local governments.

"The sides have flip-flopped," said Anirban Basu, head of the Sage Policy Group, an economic consulting firm in Baltimore. "There was a time that government induced developers to provide more affordably priced, or work force, housing. Today, it is the developer that's pushing on local government to allow for such housing. ... It's the market that's trying to address this public-policy issue, not the government."

According to a study by the National Low Income Housing Coalition, the median price for a home in Queen Anne's County has jumped from $166,900 in 2000 to $353,500 in 2005.

With the median housing price in the Baltimore region more than $310,000, housing advocates argue that the lack of affordable housing is slamming the door on homeownership - or forcing thousands to flee to distant exurbs and make unreasonably long commutes to reach their jobs and see their families.

"Buying a home in Maryland these days is very difficult," said Jonette Hahn, treasurer of the Maryland Affordable Housing Coalition, an advocacy group. "Finding a home for under $200,000 is very hard to do. Most first-time homebuyers are being shut out."

Stamato has planned to build 168 single-family homes and townhouses on 116 acres, with 10 percent, or 17 units, set aside under county rules for moderately priced housing. He donated an additional 28 acres to Enterprise Homes Inc. to build 50 more affordably priced units.

Queen Anne's County designated the parcel as a growth area in 1998 and, until two years ago, it was slated for immediate water and sewer access. But the commissioners voted in 2005 to hold off service for 20 years. They shortened that delay in 2006 to between four and 10 years. They refused to further expedite consideration May 8 - though a $32 million sewage plant opened in Grasonville a week later, according to the complaint.

Just southeast of the parcel is a 270-acre tract that the state and county hope to use as recreational space; the land deal turned contentious because the $5 million purchase price is nearly $1 million more than the average of two appraisals.

Yesterday's lawsuit caught the attention of Carl O. Snowden, director of the Office of Civil Rights for the state attorney general. He said of the county's growth practices: "They aren't opposed to all development. They are opposed to a certain type of development."

The backlash against high-density housing has been severe, as communities contend that such housing stock will further crowd schools and roads and harm the environment. There's also a stigma associated to affordably priced, or work force, housing, advocates say, as established communities worry about how their quality of life and property values will be affected by new residences of less affluence.

"Local governments are controlled by the people who vote them into office," said Hahn. "I think it's a sad reality that property owners don't want to increase the number of low-income people into their communities. There's a fear about the change in demographics. ... We need homes for people at all economic levels."

Even for lawmakers who take a fair-minded approach to allowing affordable housing, Basu said, "it's more tempting for them to embrace anti-growth stances." (baltimoresun.com)

Oregon foreclosures rise

Foreclosures in Oregon are up 23 percent in the second quarter compared with the first quarter, according to Bargain Network.

The state listed 5,208 foreclosures in the quarter, the 17th highest among all states. Percentage-wise, only Maryland, New Jersey, Hawaii and Arizona had higher foreclosure rates.

Nationwide, the number of foreclosures rose 2 percent to 422,300, or one foreclosure filing for every 877 households.

The state of Maryland recorded the highest percentage increase at 41 percent. States with the biggest declines are Louisiana, with a drop of 38 percent, and North Dakota, with a drop of 33 percent.

The complete report is at bargainnetwork.com. Bargain Network is a Santa Barbara, Calif.-based online provider of real estate foreclosures, pre-foreclosures and for-sale-by-owner property listings. (Portland Business Journal)

For sale by lender

Foreclosed properties make up 10%-15% of local property listings

Thanks to a sharp rise in foreclosures, homebuyers are increasingly likely to encounter bank-owned properties in the housing market - listed for sale, offered at auction or even touted as a "good deal" on lenders' Web sites. But getting a bargain on a foreclosed home is hardly a sure bet.

Amid a housing slump that has pushed home listings to record numbers, lenders, too, are competing to sell homes, often through the multiple-listing service. Borrowers, in many cases, have been hurt in the slowdown by a loss of equity that could have helped them avoid foreclosure.

The increase in bank-owned properties comes as more homeowners, many in the suburbs, find themselves unable to keep up with payments on loans made during the housing boom, a time when low mortgage rates, relaxed lending standards and fast-rising home prices fueled a frenzied market.

Though it's difficult to track how many foreclosed properties are listed for sale, agents who sell homes for lenders estimate they represent 10 percent to 15 percent of active listings in the Baltimore area.

In June, nearly 20,000 homes were on the market in Baltimore and the five surrounding counties, according to statistics from Metropolitan Regional Information Systems Inc.

The number of lender-owned properties is expected to grow as billions of dollars in mortgages reset in coming months, triggering higher payments for homeowners.

Loans in the foreclosure process in Maryland soared nearly 30 percent in the first quarter compared with the first three months of 2006, and the number of borrowers at least 60 days behind on payments rose 20 percent, according to the most recent report by the Mortgage Bankers Association.

While Maryland is faring better than the nation as a whole, that still means about 5,700 Maryland homeowners were in danger of losing their homes in the first quarter.

Rising foreclosures could squeeze home values even more and prolong the slump, economists say.

"Eventually, foreclosures will be returned to the marketplace," said Celia Chen, director of housing economics for Moody's Economy.com. "Lenders have to take them back and sell them and try to sell them as fast as they can. ... It will keep price appreciation weak."

Local home listings, already at a record high, will climb even more, partly because of mounting foreclosures, said economist Anirban Basu, chief executive officer of Sage Policy Group Inc. of Baltimore.

"Inventory has been rising sharply, and it will continue to rise, with the impact of ARMs [adjustable-rate mortgages] resetting and foreclosure activity," Basu said. "I don't think we've begun to see that impact in a major way."

Real estate agents and brokers, too, worry that putting more inventory into an already sluggish market will bring down prices and cause houses to sit longer.

Jennifer Marshall, an agent with Maryland REO real estate brokerage, said she is seeing the number of foreclosure properties soaring in suburban areas.

"With more inventory, it's a buyer's market now," Marshall said. "People aren't going to offer what the house is listed for. ... It's more challenging for agents, and you have to think about different ways to get your properties out there and get them sold."

Banks are increasingly buying foreclosed properties back at auction as other bids fall short of the amount owed. That scenario has become more common as the number of owners with little or no equity - or even negative equity - has grown, particularly in cases of pricier homes with more recent mortgages.

"Because we're seeing more expensive homes, higher-end homes going to foreclosure, logic indicates that less of those are being sold to third parties," or buyers other than the lender," said Donald Miller, national sales director for Express Auctions, of Baltimore. Miller said about 30 percent of the homes sold through his company's foreclosure auctions go back to the lenders, but banks tend to buy back an even greater percentage at foreclosure auctions in general.

"As a general rule, the newer loans have less equity, so there's going to be a higher percentage of buy-ins" by the bank, said Daniel M. Billig, a partner in A.J. Billig and Co., the Baltimore auction house.

Lenders' bigger stakes mean they aren't likely to discount properties they buy back and subsequently list, agents said. And lenders can invest thousands more to repair properties.

As a result, like other sellers, they're looking to get top dollar, said David McIlvaine, an associate broker with Keller Williams in Ellicott City who sells foreclosure properties for lenders.

McIlvaine said when he began listing homes for lenders eight years ago, most of the homes were lower-end properties, typically city rowhouses.

"That's not the case anymore," McIlvaine said. "We're seeing a more representative group of inventory crossing all lines."

That's because borrowers who stretched to qualify for more flexible loans - including adjustable rates, no down payments and interest-only payments - have been added to the categories of borrowers who had lost their homes to foreclosure due to job loss, illness or divorce, experts said.

"You're seeing nicer homes, higher-priced homes," agreed Jeff Rogers, an associate broker with Coldwell Banker who lists homes for lenders, who said some of the borrowers have owned their homes for two years or less. "You sort of saw that coming. [Borrowers] were being set up for failure with some of these mortgages."

Miller, at Express Auctions, one of a handful of auction houses that handles the majority of foreclosure auction sales in the state, said investors continue to buy most auctioned properties that aren't bought back by lenders.

But individual homebuyers are starting to get into the mix, as investor Ed Kowalski has noticed.

"On a few occasions I have been outbid by owner-occupants," said Kowalski, who buys, renovates and resells homes in Baltimore and Baltimore County. "Generally, they'll pay more than I'll pay as an investment."

One homebuyer who came to an Express Auction in May beat out an investor on a three-year-old house in Hampstead, with a winning bid of $567,500. Before the auction, the owners had listed it for sale at $1 million, Miller said.

The buyer of the property got a sprawling five-bedroom house with a master bedroom, sitting room with coffee bar, workout room, library and a three-car garage, in a neighborhood where houses have sold for more than $700,000.

Buying at foreclosure auction is not without hurdles.

Successful bidders often must pay a cash deposit, typically 10 percent of the outstanding loan amount. The new owner must pay off any liens or second mortgages. And properties are sold as is. And an owner or tenant living in the house may or may not be cooperative about moving out.

Sihin Shiferaw, an investor who buys and rehabs homes in Baltimore City and Howard County, mostly at auction, recently took a chance on a bank-owned home listed for sale. After signing a sales contract, she discovered water in the home's basement and backed out of the deal, losing a $2,000 deposit.

Evelyn Ray, a real estate agent with Long and Foster in Bel Air, is hoping the increase in foreclosures might help some of her clients who are struggling to buy a house in the aftermath of a soaring market. Ray said she has begun looking for foreclosure properties to show her clients.

"Now, people just cannot afford the houses that are out there," said Ray. "I have about 30 buyers who are just waiting. They either can't afford the houses they want or are just scared or waiting for prices to come down, or they can't sell."

Cathy Holmes, a single mother of three who works as a biological lab technician at Aberdeen Proving Ground, hopes to find a deal on a foreclosed home as a last resort to finally be able to move from a rental apartment in Whiteford. Ray, her agent, has taken her to see several homes. But so far she hasn't been able to come up with the deposit that would qualify her to bid.

"I've been renting the same apartment for 11 years, it's just impossible to get out," said Holmes, who is looking for a single-family house with some land. "I just want to have a house where I don't have to hear the neighbors' telephones ringing and their conversations. I look and I look and I look. I just can't find anything that I can afford." (baltimoresun.com)

Mortgage foreclosures are up -- and so are the scams.

Let's say you have received a letter from your mortgage lender advising that if you do not bring your payments current, the lender will have no alternative but to begin foreclosure.

Within days of receiving this notice, you may get a telephone call: "Hi, my name is I.B. Scammer, and I understand that you are delinquent on your mortgage payments. You don't want to lose your beautiful home, and my company can assist you. When can I come over to explain how we operate and how we can help you?"

Hang up immediately. In the trade, these people are often referred to as "bird dogs" -- they'll search for victims and then go after them when they are down.

One large category of mortgage-foreclosure scams is the "rescue" -- when the bad guys prey on the desire of homeowners to be rescued from looming foreclosure. A 2005 report from the National Consumer Law Center highlighted three types of rescues. Even though the report is two years old, its observations are relevant. The types are:

· Phantom help. Here, the "rescuer" will charge the unsuspecting homeowner to do what the owner could have done on his own. For example, the rescuer may make some phone calls or fill out paperwork, but eventually he "abandons the homeowner to a fate that might well have been prevented with better intervention."

· Bailout. The caller tells the consumer that if the homeowner will sign over a deed to the house, the caller will pay off the mortgage and allow the homeowner to stay in the house for at least a year. Then the consumer can repurchase the property, usually for considerably more than the value of the house. "The terms of these deals are almost invariably so onerous that the buyback becomes impossible, the homeowner permanently loses possession, and the 'rescuers' walk off with all or most of the home's equity," the report concluded.

· Bait and switch. The homeowner believes that he or she is merely signing documents for a new loan so that the mortgage can be brought current or paid off. But in reality, the consumer has signed the deed to the house over to the "rescuer."

In 2005, Maryland adopted laws that aim to protect homeowners from these rescue consultants. Similar legislation is under consideration in the District. Recently, Maryland Gov. Martin O'Malley (D) started an initiative that will use $111 million of state funds to help homeowners in financial trouble.

Homeowners who face foreclosure are often desperate for assistance and rely on emotions rather than careful consideration of options. But options are available.

First, talk with your mortgage lender. Most legitimate lenders do not want to foreclose. This is based not on sympathy for the homeowner but on economic reality. If no one buys the house at the foreclosure sale, the lender is stuck with the property and must pay the taxes and insurance until it is sold.

The lender may be able to help in a number of ways. It may defer or reduce monthly payments for a time. It may arrange to refinance your adjustable-rate mortgage so that you will have fixed monthly costs instead of facing escalating payments. It may also allow you to sell your house in what is called a short sale. This means selling for less than you owe, with the lender forgiving some or all of the shortfall.

Second, talk with a consumer counseling service. For example, Maryland homeowners can use several foreclosure counseling services throughout the state. (The full list can be found at http://www.oag.state.md.us/Consumer/foreclose.htm.) Seniors -- especially those with low income -- can contact their local AARP office. The Homeownership Preservation Foundation, a nonprofit sponsored by lenders and others, runs a round-the-clock counseling hotline; call 888-995-HOPE for free advice.

Third, talk with your neighbors. Perhaps they can provide some temporary financial assistance or offer other ideas. After all, if your house is foreclosed on, it may reduce market values in the neighborhood. In the past few months, I've heard of neighbors helping neighbors financially, mostly to protect the values of their own homes.

Fourth, arrange to see a lawyer who specializes in bankruptcy law. Although no one wants to file for bankruptcy protection -- and recent changes in the law make it difficult to do so -- it is an option.

The National Consumer Law Center makes these recommendations on what not to do:

· Don't panic.

· Don't sign a contract under pressure.

· Don't sign any papers without consulting legal counsel.

· Don't rely on the rescuer's translator if you are not conversant in English. All too often, that translator is another bird dog paid by the rescuer to make his case.

· Don't rely on oral statements or promises; get everything in writing.

Consumer protection laws and education are important. But you -- the homeowner -- must protect yourself. Say no to the bird dogs. (washingtonpost.com)

Economist: Record Foreclosures Could Hit Maryland

BALTIMORE - Maryland's foreclosure rates have been among the lowest in the country, but a local economist says the worst is still to come.

Anirban Basu warns of increased "blood in the water" as the impact of the housing downturn hits the state.

"Thus far the rate of foreclosures in Maryland has not had an effect overall because we have not yet seen a period of elevated foreclosure rates," said Basu, chief executive of Sage Policy Group, an economic consulting company in Baltimore. "However they are rising fast and the worst period is in front of us, not behind."

So far, Maryland has avoided the record foreclosures on both the prime and subprime markets in other parts of the country.

"Maryland's foreclosure inventory rate of .5 percent and new foreclosure rate of .31 percent are well below the national rates of 1.19 percent and .57 percent," said Doug Duncan, chief economist and senior vice president of research at the Mortgage Bankers Association.

Basu told The Baltimore Examiner that the increase in housing stock in Maryland is due to "the resettling of adjustable mortgage rates and the fact that people can't make those high interest payments. In addition, people over did it on the amount of debt they took on, not only with homes, but car and credit card debt and loans with has translated into increased delinquencies, and sadly, involuntary (foreclosure) home sales."

The Maryland Bankers Association says that while nearly 70 percent of Americans own their own homes, many that qualified did so with adjustable rate loans or subprime loans whose high interest rates borrowers can no longer afford.

"The regulatory environment is shifting," said Basu. "Borrowers who could have accessed credit in 2002-2003 can't anymore. The subprime market is virtually shutdown. If the state's economy falters and unemployment rises there will be increased blood in the water in respect to foreclosures." (www.examiner.com)

First-time homebuyers, just say no to foreclosures

Q:I am a first-time homebuyer and I want to buy a foreclosure property. Do you think this is a good idea? And can I get a mortgage for a foreclosure property? Thanks! Lyle T.

A: Dear Mr. T:

Something is telling me that this could be a big mistake, but you and I may be thinking of two different things. If you are asking about buying a pre-foreclosure property, listed by an agent or for sale by owner ("FSBO", pronounced "fizzbo" in common usage) that you can see in advance and have inspected and appraised, then fine. The process is the same for buying a pre-foreclosure property as it is for buying any other property.

If you are talking about buying a foreclosure property at auction, then I do not recommend it for a first-time home buyer. Auctions are interesting. It is a unique group of people that show up to bid on properties.

Generally speaking, investors bid on properties, often sight-unseen, and they accept a great deal of risk in doing so. What is the condition of the property? Will it be delivered vacant or will they have to evict the former owners? There are no guarantees. This type of investor is generally pretty battle-hardened, has rehabbed properties before, and has some extra capital to carry the property and pay attorney's fees if any legal issues arise after the purchase.

And sometimes the properties are sold at or above market value and are not the instant bargain that people think they are. If you are thinking of buying your first home at auction, please think again.

As for financing, you can obtain a mortgage to buy a foreclosure property. The lender has to know that the property is in foreclosure, but you can get pre-approved for a mortgage subject to a ratified contract, appraisal and title work.

People who buy at a foreclosure auction are seeking instant equity over everything else - location, (think school districts and your commute to work), the number of bedrooms and bathrooms, recent renovations, upgraded systems, etc. But today's market is already a buyer's market. There is so much more to enjoying living in your first home than how much instant equity you have in your property.

You should interview three realtors or buyers agents that specialize in working with first-time home buyers. Pick the one that you feel listens to you and understands your concerns the best. Have your agent help you articulate your goals and prioritize a list of must-haves for your home. If you are not already pre-qualified for a home loan, get pre-qualified as soon as possible so your real estate agent knows your purchasing power. (http://media.www.districtchronicles.com)

Don't Get Duped by Hidden Mortgage Fees

Q: DEAR BOB: Which home mortgage fees are proper for a lender to charge borrowers? -- Stephen O.

A: DEAR STEPHEN: Some mortgage lenders are constantly working to create new names for unnecessary fees to impose on naive borrowers. Start shopping among at least a half-dozen mortgage lenders for a "no-cost, no-fee" home loan. In today's market, I recommend obtaining a fixed-rate mortgage.

However, if you are certain you won't keep your home more than five years, then an adjustable-rate mortgage fixed for five years can save you a few interest dollars. Be certain that it does not contain a prepayment penalty or negative amortization, whereby the interest rate adjusts monthly or semiannually and unpaid interest is added to your loan balance.

If you are dealing with a direct lender, such as Wells Fargo, Bank of America or Countrywide, the lender's good-faith estimate must reveal all loan charges. But you might be asked to pay legitimate fees to third parties, such as for the appraisal, credit report and lender's title insurance. That's fine. Those are not junk fees.

However, if you are dealing with a mortgage broker, his or her written good-faith estimate might be less reliable.

Watch out for previously undisclosed fees with such creative names as underwriting fee, document preparation fee, loan review fee, warehousing fee and loan origination fee.

If the lender asks you to pay a loan fee of 1 or 2 percent of the amount borrowed, usually called points, ask how much reduction you will receive in the interest rate. For each point paid, you should receive at least a one-eighth percentage-point reduction in your loan's interest rate for the life of the mortgage. Pay a loan fee only if you expect to stay in the house at least 10 years. Otherwise, take the no-cost, no-fee loan with all lender charges included in the interest rate.

DEAR BOB: Our condo homeowners association was assessed $6,000 each for replacement of roofs, which we have to pay even if we sell the condo. My roof was replaced last year, but they still want me to pay $6,000. What can I do? -- Rita S.

DEAR RITA: Your homeowners association was not assessed. Instead, the association has assessed condominium owners $6,000 each to replace the roofs. That's the way a homeowners association works. Even when your individual condo unit won't directly benefit, you are subject to special assessments, approved by the board of directors, that benefit the entire condo complex.

DEAR BOB: My widowed mother died recently, and the lawyer who prepared her trust wants to charge an outlandish fee to fill out the court papers for her small estate. Is it possible that I could file the papers myself with the court? Where do I obtain them? -- Eugene B.

DEAR EUGENE: If your mother left her major assets in a revocable living trust, no probate court proceedings are required. However, if she left a will with a testamentary or irrevocable trust, probate court proceedings are probably required. This is not a do-it-yourself project.

Shop around among probate lawyers. Although state law sets a maximum for probate legal fees based on the gross value of the estate, most probate lawyers will adjust their fees downward if you ask unless there are complications or a will contest involving the heirs.

DEAR BOB: Several days after we phoned our neighbor to ask him to quiet his barking dog, and to stop running his tractor and spewing carbon monoxide near my disabled daughter's room, he built a "spite fence." I live on a lake and had a nice view from my kitchen window for 28 years. What chance do I have to either remove part of the fence that blocks my lake view or cut it down by two feet? What recourse do I have? -- Elly W.

Use Local Explorer to learn about Washington, D.C., Maryland and Virginia communities.

DEAR ELLY: Unless your city or county has a view-protection ordinance, you have no legal right to a view. However, if the neighbor's tall fence is defined by local ordinance as a spite fence, usually 6 feet or taller and built without a required building permit, you may have a legal right to have the fence removed. Consult a lawyer for details.

DEAR BOB: In 1988, my husband and I bought a house together. In 1994, we got divorced, and I removed his name from the title. We remarried in May 2006. I added his name back to the title. If we sell our home within a year and file our income tax returns jointly for 2006, can we claim the $500,000 home-sale tax deduction? -- Rita R.

DEAR RITA: Not yet. For your husband to qualify for an additional $250,000 principal-residence-sale tax exemption, Internal Revenue Code 121 says he must occupy the principal residence at least 24 of the 60 months before its sale.

However, he does not have to be on the title if he meets the 24-month principal-residence-occupancy test and you file a joint income tax return in the year of principal residence sale. Consult a tax adviser for details.

DEAR BOB: I am interested in finding out who is buying the house next door to mine. The sale is pending. Is there any way to learn other than asking the buyers or realty agents directly? -- Carole B.

DEAR CAROLE: No. Until a home sale closes and the title transfer is recorded, the real estate agents and the other parties handling the transfer cannot legally disclose who is buying the home. That is confidential information.

Nor can they reveal the purchase price without breaching their fiduciary duty to the seller and buyer. The only way to find out the buyer's name now is to ask the seller. But that individual doesn't have to disclose the buyer's name.

DEAR BOB: I feel the sellers from whom I bought my home did not disclose a material and expensive problem with the house. The neighbors tell me the previous owners tried extensive repairs over the years to remedy the problem but did not succeed. Is there any way I can learn the disclosures the sellers of my house were given when they bought? -- Diane S.

DEAR DIANE: No. You have no legal right to obtain the written disclosures made to your seller unless they are public information, such as local building permits, pest control inspection report, etc.

Of course, if there are any warranties, such as a 10-year roof warranty, you are entitled to the balance of the covered period. Consult a lawyer for details.

DEAR BOB: I gave my tenant notice to move, confirmed with a receipt of notice. She agreed to move out, but the unit is now locked and no one is there, though her car is parked in the driveway. I phoned several times, but no reply. What options do I have? I have already hired a contractor to update the unit, based on the tenant's promise to move out on schedule. -- Paras R.

DEAR PARAS: Consult a lawyer whose specialty is evictions. I'm sure you have thought of the possibilities: The tenant moved out but left the car, abandoned the apartment and the car, died either in the apartment or elsewhere, is in a hospital, is in jail, is avoiding you because she refuses to move out, or wants to drag out the eviction procedure to obtain as much free rent from you as possible.

All these situations have happened to me with my rentals. Ask the neighbors if they have seen your tenant or any activity at the rental. Then contact the local police to learn if they have any record of activity at the property or if they can trace your missing tenant. After that, follow your attorney's advice to regain possession of your rental unit.

DEAR BOB: Several years ago, my mother gifted her house to me because she was moving into her new husband's home in Florida. Now I want to sell that house, but my tax adviser says I am stuck with my mother's cost basis of only $23,000, while the house is worth about $375,000 today. At the time of the gift, the house was worth about $225,000. Will I have to pay tax on all that capital gain? -- Alan P.

DEAR ALAN: Your tax adviser is correct. The general rule for gifts is that the donee takes over the donor's basis for a property.

Unless the property is your principal residence and you have owned and occupied it at least 24 of the 60 months before its sale so that you can qualify for the $250,000 tax exemption of Internal Revenue Code 121 (up to $500,000 for a qualified married couple filing jointly), your capital gain will be taxable. The good news is the federal capital gain tax rate is only 15 percent.

DEAR BOB: Last year, my husband bought a house with his name on the title and mortgage. I help him pay the mortgage and property taxes. What is the best way for him to transfer 5 percent of the property to my name? How much will it cost? -- Patricia S.

DEAR PATRICIA: If you will be receiving only a 5 percent interest in the property, that means you probably want to hold title as a tenant in common with your husband, who will retain a 95 percent interest. Each of you needs valid written wills to pass your interests upon the death of either of you to whomever you each designate.

Your husband can convey a 5 percent interest in the house to you by a recorded quitclaim deed. The deed should include a legal description of the property, the percent interest transferred to you, the official parcel number, the method of holding title and his notarized signature so the deed can be recorded.

DEAR BOB: My parents divorced in 1995. The judge gave the house to my mom, but she had to either sell it or refinance the mortgage. She wanted to keep the house, but she couldn't refinance because her debt-to-income ratio was too high. My mother gave me a quitclaim deed, signing the house over to me, and I helped her refinance with a new mortgage. Now I want to get my name off the title and put my mother back as sole owner, as she desires. If I do that and my mother dies, am I responsible for the mortgage payments even though I don't hold title? What do I need to do to quitclaim the house title back to my mom? Do I need to go through a title company? -- David P.

DEAR DAVID: If you are now on the title alone, you can sign a quitclaim deed to your mother. However, you will still remain liable to make sure the mortgage payments are made even when you don't hold title to the property.

After your mother dies, the title to the house goes to whomever she names in her will or revocable living trust.

You don't need to go through a title company to quitclaim your title to your mother. The deed must include a legal description of the property, usually with its parcel number, and your signature must be notarized so the deed can then be recorded to transfer title to your mother.

DEAR BOB: Our next-door neighbor, Charlie, is about 65 and retired. He is divorced and lives alone. In 1995, he and his then-wife bought the house for $220,000. Today, it is worth about $650,000. His ex-wife is asking that he sell the house so she can receive her half of the profit. Charlie doesn't want to sell the house and move. My wife and I trust him completely and are willing to use our liquid assets to help him stay in his house. We are thinking of buying the house from him for cash and then selling the house back to him. Or perhaps we can lend him the money to pay off the mortgage and buy out his wife's share, with him getting a home-equity line of credit to pay us back. What should we do? -- Ashley S.

DEAR ASHLEY: If Charlie can qualify to get a home-equity line of credit for the amount needed to buy out his ex-wife and pay off the existing mortgage, let him do it on his own. No sense in you getting involved in a potentially messy situation.

If he can't qualify for a new mortgage, perhaps you can buy the house and rent it back to him. That would give you the rental-property tax benefits, and Charlie and his ex-wife could each claim their principal-residence-sale tax exemption, up to $500,000 total. Consult a tax adviser for details.

DEAR BOB: I have heard that some people can have a custom home constructed by a builder and after construction is complete wind up with 50 to 60 percent equity in their new homes. Is this true, and how can I go about doing this? -- Greg H.

DEAR GREG: Hire a quality custom home builder who charges low construction prices. If you already own a building lot, that gives you a head start. There is no guaranteed way to turn a fast profit on new custom homes unless you can lock in a low construction price and market values rise during construction. (washingtonpost.com)

Baltimore City: Fire highlights lack of shelter for poor

The rowhouse fire in East Baltimore that claimed the lives of six people and left seven injured highlighted a hidden problem of Baltimore housing: poor families who are unable to find or afford decent shelter banding together under one roof.

Advocates said yesterday that the problem is the result of an acute shortage of adequate housing for the city's neediest residents.

They pointed out that the Housing Authority of Baltimore City's inventory has declined by more than 5,000 units in the past 15 years, and that as many as 3,000 other federally subsidized units have been lost during that time. They also said that the loss of permanent subsidized units is not being made up by increases in housing vouchers that allow low-income families to rent in the private market.

"The question I've always tossed out is, 'What happens to all these folks? Where are they?'" said Gregory Countess, assistant director of advocacy for housing and community economic development for the Legal Aid Bureau of Maryland. "The fact that you've got thousands of units of housing lost means that you've lost opportunities for people to live in places that are safe and decent and affordable."

Barbara Samuels, an American Civil Liberties Union lawyer who specializes in housing issues, said about 29,000 Baltimore families are on the waiting list for public housing - a number that is double the number of units available in the city's portfolio of properties.

"Certainly, it symbolizes the desperate need and demand for affordable housing and the diminishing supply of opportunities," she said of the number of people who were living in the Cecil Avenue rowhouse near Green Mount Cemetery. "You see that in the families that have doubled up, tripled up, in this case maybe even quadrupled up."

The loss of low-income units is not restricted to Baltimore. In recent years, Baltimore County has demolished or plans to demolish about 1,500 units in projects such as Kingsley Park, Samuels said. Because the housing market is regional, the loss of those units can also affect the demand for low-income housing in the city, she says.

"Was some of that housing bad?" she said. "Sure. But nothing is being done to replace it."

Nationally, the National Low Income Housing Coalition wants to create 1.5 million new rental units for needy families, a goal that carries a price tag of about $5 billion, said Nicole Letourneau, a spokeswoman for the advocacy group.

A first step toward reaching that goal was taken Tuesday, when the House of Representatives included $600 million over five years for a national housing trust fund as part of reform legislation for federally chartered private lenders, Letourneau said.

"From the standpoint of the NLIHC, doubling up and tripling up in housing is one of the effects of having a lack of housing that's affordable to people with the lowest incomes," she said.

In Baltimore, the practice - which appears to have been the case in the Cecil Avenue rowhouse - is nothing new.

"It's always been a problem," said Stanley Sugarman, a longtime property owner and manager who recently got out of the business. "I used to go around and see the tenants and you'd see people in the basement or my plumber would tell me there are people sleeping next to the hot water heater. They'd say, 'The people are just visiting.'"

The problem is partly a lack of money in a city where the poverty rate for individuals is nearly 23 percent and for families is nearly 19 percent, figures that are nearly double the national average, according the Census Bureau's most recent American Community Survey.

"A lot of people don't have the ability to pay for decent housing," Sugarman said. "They have to double up. They rent rooms."

The phenomenon is also reflective of broader problems in the city's low-income rental market.

In a 2005 study funded by the Abell Foundation and published by the Urban Institute entitled "Low-End Rental Housing: The Forgotten Story in Baltimore's Housing Boom," Sandra Newman found that the low-income rental market was in "poor shape."

Newman, the director of the Johns Hopkins Institute for Policy Studies, found that as of 2000, half of the rental units in the city were costing less than $400 a month.

"But because so many renters are poor, even these low rents are unaffordable to many," Newman wrote. "There are about two poor renters for every affordable housing unit in the city."

Advocates say the situation may be getting worse, as the gentrification of some city neighborhoods and the redevelopment of others have led to the loss of private low-end rental units.
In addition, the waiting list for the city's housing voucher program has been closed for four years. Exceptions, according to the Housing Authority's Web site, are made for families who fall into several categories, including being victims of natural disasters, being intimidated victims or witnesses to crimes, being displaced by public action or having a member with a disability.

Presumably, at least one of the families in the Cecil Avenue rowhouse would have qualified under these circumstances, because one of the children used a wheelchair.

But Lauren Young, of the Maryland Disability Law Center, said being on the waiting list is no guarantee of immediate housing.

"It's a long waiting list," she said.

The Housing Authority did not respond to a request for comment.

But in a March draft of its plans for the next two years, the authority said that its "fundamental problem" was "inadequate and unpredictable funding."

Over the past several years, the draft said, the agency's federal operating funds have been cut by $26.2 million and its housing voucher monies have been cut by $18.9 million.

"Maximizing the number of households served will be extremely difficult in light of the inflationary nature of the rental market," the report said.

But Samuels, of the ACLU, said the Housing Authority lost funding for 2,000 vouchers that it failed to use during a six-year period from 1997 to 2003, and that it was diverting millions of dollars worth of vouchers from 2006 through 2008 to other uses.

She charged that the authority is using federal regulatory flexibility to "downsize" its low-income housing assets and calculated that the agency is serving 750 fewer families with vouchers and public housing units than it did in 1992.

Samuels said the authority should be serving more families because of additional vouchers it received to compensate for the loss of demolished public housing and federally subsidized rental units.

"The need is always there," she said. (baltimoresun.com)

Baltimore: Tax sale proceeds amid fairness concerns

Baltimore's annual sale of rights to collect back property taxes proceeded as usual Monday despite pending city legislation that would keep homes from being included in the process over unpaid water bills and Mayor Sheila Dixon's suggestion of amnesty for such debts.

Stanley Milesky, chief of the city's Bureau of Treasury Management, said he didn't yet have information on how many of the 7,699 liens sold to investors involved water bills or other small municipal liens. About 750 such liens changed hands in last year's tax sale.

Rather than trying to collect back taxes themselves, many Maryland jurisdictions sell the collection rights to investors in annual auctions. Those investors buy the right to charge interest and fees that often amount to thousands of dollars, and the right to sue to seize the homes through foreclosure if the debts aren't paid. Some jurisdictions include debts other than taxes in the lien sale process, though that is rare outside of Baltimore.

The Sun reported in March that 400 city homes have been lost to foreclosure over debts other than property taxes in the past three years. Most stemmed from unpaid water and sewer bills, though some also included alley repaving charges, sidewalk repairs and even fees to register rental property. About half involved unpaid charges of $500 or less.

Milesky said city officials have been meeting weekly to discuss tax sales and are expected to make recommendations to Dixon within the month on possible improvements to the system.

"All the other issues with tax sales notwithstanding, it still remains a really effective means for the city to collect the amounts due," Milesky said.

The status of the mayor's amnesty idea, which she brought up during an interview with The Sun for the March story, is unclear.

"That wasn't necessarily the course of action that she charged the work group with," said Demaune Millard, a spokesman for the mayor's office. "The mayor is looking for more than a short-term fix. She's looking at a long-term solution."

City Councilman Bernard C. "Jack" Young, the 12th District councilman who has twice proposed a bill to end tax sales stemming from water bills, is frustrated by the slow pace of reform. City officials have contended that many people would not pay their water bills without the threat of a tax sale and potential foreclosure.

"Working with the Finance Department to get a remedy is just not moving fast enough," he said yesterday. "They're talking about it hurting the bond rating, but I just don't buy that. I'm still concerned about people losing their homes over water bills and especially such low water bills."

Young said he also is considering proposing bills to reduce the amount of interest that can be charged by people purchasing tax liens.

City Councilwoman Mary Pat Clarke, of the 14th District, has introduced a bill to keep liens of less than $1,000 out of tax sales. She also has said that she does not think that water bills, alley pavings and other small bills belong in tax sales.

Yesterday, Circuit Court Clerk Frank M. Conaway Sr., an announced candidate for mayor, sent a letter to the attorney general's office asking him to look into what "seems to be a consumer rights problem." Conaway said that people whose homes are put into tax sale might not realize that they can receive the difference between taxes owed and the bid price minus interest and expenses.

"I think there are millions of dollars that have been taken away from people," Conaway said in an interview yesterday. "It bothers me that people might be getting ripped off - that they aren't getting proceeds they should be getting."

State Sen. George W. Della Jr., who has introduced legislation to reform tax sale law, said he does not know of any summer study planned. But he intends to introduce legislation next session.

"I don't get disappointed nor do I get discouraged," he said. "It's not a fair way for local government to do business. I understand they want to get paid, but let's do it in a fair and equitable way."

Della, too, is concerned about the inclusion of water bill liens in tax sale.

"I think it's ludicrous for residential properties," he said. "It shouldn't be. Is that going to break the back of the city of Baltimore, if they don't get paid their water bill? I don't think so." (baltimoresun.com)

O'Malley heads to Las Vegas for shopping convention

BALTIMORE - Governor Martin O'Malley doesn't have much time to rest after the Preakness Stakes. He's headed to Las Vegas tomorrow for a shopping center convention, where he'll pitch Maryland for retail real estate deals.

The governor will be joined by Baltimore's mayor and county executives from Baltimore, Harford, Howard and Prince George's counties.

The International Council of Shopping Centers is a can't-miss event for local officials looking for economic development deals. Organizers say one out of every three retail real estate deals are either conceived at this meeting or completed there.

Maryland will spend 160-thousand dollars on the convention, including airfare, hotels, a large reception and building a booth that includes three meeting rooms. (abc2news.com)