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)
Monday, July 23, 2007
Thursday, July 19, 2007
Washington, DC: Mayor Hopes for $117 Million Yearly
Mayor Adrian M. Fenty said on Monday that he wants to allocate $117 million in new revenue every year as part of a plan to protect and create affordable housing in the District.
According to an outline of the initiative, which Fenty (D) presented to more than 500 Washington Interfaith Network members, 30 percent of new housing units built on city-owned land must be affordable for low-income residents.
The plan calls for a partnership between the city and the interfaith network to produce 5,000 homes as part of a network project that creates low-income housing. The houses would be built in transitional neighborhoods such as Columbia Heights, Brightwood, Deanwood, Bellevue and Washington Highlands, said Sean Madigan, communications director for the office of the deputy mayor for planning and economic development.
"This is very aggressive, but a lot of people say the city is really facing an affordable housing crisis, so steps like this are necessary," Madigan said.
The Rev. Christine Wiley of Covenant Baptist Church in Southwest, which was the host of the event, praised Fenty's proposal. "I usually come up here shaking my finger at somebody," she said.
The District lost 312 affordable units between 2001 and 2005, according to a recent report by the U.S. Government Accountability Office.
Fenty's announcement comes a year after he pledged at a meeting with interfaith network leaders that he would implement the group's Vote Neighborhoods First agenda, which asked for $1 billion to be committed to neighborhood revitalization.
Many D.C. residents have seen available housing transformed into high-priced condominiums. Patricia Moten, an interfaith network member who is minister at First Rock Baptist Church, said the steady gentrification is pushing low-income residents out of their homes and into relatives' crowded residences.
Brenda Jordan, president of the Pleasant Park Tenant Association, said the tenants in her building plan to buy it in October. Their company representatives told them last year that they had received an offer to turn the property into condominiums.
"The majority of the people here, we're born and raised here, and we want to stay here," she said. "I know I do." (WashingtonPost.com)
According to an outline of the initiative, which Fenty (D) presented to more than 500 Washington Interfaith Network members, 30 percent of new housing units built on city-owned land must be affordable for low-income residents.
The plan calls for a partnership between the city and the interfaith network to produce 5,000 homes as part of a network project that creates low-income housing. The houses would be built in transitional neighborhoods such as Columbia Heights, Brightwood, Deanwood, Bellevue and Washington Highlands, said Sean Madigan, communications director for the office of the deputy mayor for planning and economic development.
"This is very aggressive, but a lot of people say the city is really facing an affordable housing crisis, so steps like this are necessary," Madigan said.
The Rev. Christine Wiley of Covenant Baptist Church in Southwest, which was the host of the event, praised Fenty's proposal. "I usually come up here shaking my finger at somebody," she said.
The District lost 312 affordable units between 2001 and 2005, according to a recent report by the U.S. Government Accountability Office.
Fenty's announcement comes a year after he pledged at a meeting with interfaith network leaders that he would implement the group's Vote Neighborhoods First agenda, which asked for $1 billion to be committed to neighborhood revitalization.
Many D.C. residents have seen available housing transformed into high-priced condominiums. Patricia Moten, an interfaith network member who is minister at First Rock Baptist Church, said the steady gentrification is pushing low-income residents out of their homes and into relatives' crowded residences.
Brenda Jordan, president of the Pleasant Park Tenant Association, said the tenants in her building plan to buy it in October. Their company representatives told them last year that they had received an offer to turn the property into condominiums.
"The majority of the people here, we're born and raised here, and we want to stay here," she said. "I know I do." (WashingtonPost.com)
Tuesday, July 17, 2007
Victims Of A Foreclosure "Rescue"
New data released Thursday shows that so far this year, there have been a total of 925,986 foreclosures filing nationwide — an increase of 56 percent from last year. But homeowners in distress could face a double whammy: A growing scam is exploiting people who are in foreclosure in a way that leaves them with nothing. Chief investigative correspondent Armen Keteyian shows how the scam works.
Annie Stephens, a 70-year-old grandmother, has lived in her Atlanta home for 40 years.
"I just don't feel like I belong anyplace else," Stephens said.
But after suffering a stroke, she found herself unable to work — and unable to pay her bills.
"Once you get behind, it's hard to catch up. Hard," Stephens said.
Within days of foreclosure, Stephens was overwhelmed with ads promising instant relief, an easy way out.
They proved anything but. She says a con artist claiming he'd help refinance her home instead stole it, then stripped away tens of thousands of dollars in equity.
"They're just no-good scamming vultures," Stephens said.
It's known as "foreclosure rescue" but a CBS News investigation has uncovered an unending trail of victims across the country.
As the number of foreclosures soars to record levels — up nearly 90 percent from this time last year — so does mortgage fraud. CBS News has learned the FBI currently has more than 1,100 cases pending; in 2003 that number was just 436.
Sources say the Metropolitan Money Store in Maryland was one of them.
When Keteyian knocked on the door there, it was apparent the place had been shut down.
"We have helped stop over 250 foreclosures and have refinanced thousands of homes," the company's radio ad says.
A major class action law suit now charges the Metropolitan Money Store of being "the single largest mortgage scam in Maryland history ... an elaborate scheme to dupe" more than 400 homeowners "of millions of dollars in lost equity."
State investigators describe the scheme as a classic come-on: a desperate homeowner buried in debt and facing foreclosure is convinced to transfer the deed of their home to a third-party investor with the promise of getting it back. Instead, the company sucks the equity out of the house, leaving the original owner in desperate straits.
One group says they were victims of the Maryland scheme.
"It’s an empty feeling. It feels like a bottomless pit," a member of the group told Keteyian
"Do you feel like you were cheated?" Keteyian asked.
"Absolutely. Out of our home and more," one said.
"They took the equity and make the credit worse than it was before," another explained.
"I think this is one most outrageous scams in the United States at this time," said Elizabeth Renuart of the National Consumer Law Center.
Renuart says such shady deals are skyrocketing as the mortgage market implodes. "Financial distress is the weakness that they exploit because people are so concerned about losing their homes they'll do almost anything to save them," she said.
Only seven states specifically regulate foreclosure rescues; only one, Massachusetts, makes it illegal.
In Maryland, CBS News wanted to talk to the people who allegedly ran the scheme.
Despite repeated attempts, CBS News was unable to reach Joy Jackson Fordham or her husband, Kurt Fordham, who is also implicated in the scheme. The only trace of them were photos of their $800,000 wedding last year. It was an over-the-top, Hollywood-style affair at which they gave away cash, a Porsche and — in a final insult to folks like those CBS News interviewed — a house.
"What?" one of the victims said.
Could it have been one of their houses?
"That was our wedding!" one woman said. "We didn’t get invited." (CBS News)
Annie Stephens, a 70-year-old grandmother, has lived in her Atlanta home for 40 years.
"I just don't feel like I belong anyplace else," Stephens said.
But after suffering a stroke, she found herself unable to work — and unable to pay her bills.
"Once you get behind, it's hard to catch up. Hard," Stephens said.
Within days of foreclosure, Stephens was overwhelmed with ads promising instant relief, an easy way out.
They proved anything but. She says a con artist claiming he'd help refinance her home instead stole it, then stripped away tens of thousands of dollars in equity.
"They're just no-good scamming vultures," Stephens said.
It's known as "foreclosure rescue" but a CBS News investigation has uncovered an unending trail of victims across the country.
As the number of foreclosures soars to record levels — up nearly 90 percent from this time last year — so does mortgage fraud. CBS News has learned the FBI currently has more than 1,100 cases pending; in 2003 that number was just 436.
Sources say the Metropolitan Money Store in Maryland was one of them.
When Keteyian knocked on the door there, it was apparent the place had been shut down.
"We have helped stop over 250 foreclosures and have refinanced thousands of homes," the company's radio ad says.
A major class action law suit now charges the Metropolitan Money Store of being "the single largest mortgage scam in Maryland history ... an elaborate scheme to dupe" more than 400 homeowners "of millions of dollars in lost equity."
State investigators describe the scheme as a classic come-on: a desperate homeowner buried in debt and facing foreclosure is convinced to transfer the deed of their home to a third-party investor with the promise of getting it back. Instead, the company sucks the equity out of the house, leaving the original owner in desperate straits.
One group says they were victims of the Maryland scheme.
"It’s an empty feeling. It feels like a bottomless pit," a member of the group told Keteyian
"Do you feel like you were cheated?" Keteyian asked.
"Absolutely. Out of our home and more," one said.
"They took the equity and make the credit worse than it was before," another explained.
"I think this is one most outrageous scams in the United States at this time," said Elizabeth Renuart of the National Consumer Law Center.
Renuart says such shady deals are skyrocketing as the mortgage market implodes. "Financial distress is the weakness that they exploit because people are so concerned about losing their homes they'll do almost anything to save them," she said.
Only seven states specifically regulate foreclosure rescues; only one, Massachusetts, makes it illegal.
In Maryland, CBS News wanted to talk to the people who allegedly ran the scheme.
Despite repeated attempts, CBS News was unable to reach Joy Jackson Fordham or her husband, Kurt Fordham, who is also implicated in the scheme. The only trace of them were photos of their $800,000 wedding last year. It was an over-the-top, Hollywood-style affair at which they gave away cash, a Porsche and — in a final insult to folks like those CBS News interviewed — a house.
"What?" one of the victims said.
Could it have been one of their houses?
"That was our wedding!" one woman said. "We didn’t get invited." (CBS News)
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)
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)
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