Bill could help
homeowners avoid foreclosure Baltimore
Measure would grant time to modify mortgages, encourage lenders to negotiate
By Gus G. Sentementes and Liz F. Kay
February 24, 2009
As the Obama administration moves on a national plan to tackle the mortgage crisis, City Council members Mary Pat Clarke and Bill Henry, both Democrats, have introduced a plan to extend the time between foreclosure and eviction from 14 days to 365 days to encourage lenders to negotiate with owners who are falling behind on loan payments.
The plan appears to have strong initial support on the council - 11 of 15 members are listed as co-sponsors. Council President Stephanie C. Rawlings-Blake and Mayor Sheila Dixon have yet to take a position.
The news conference at which Clarke and Henry announced the bill occurred about the time that an activist with the Association of Community Organizations for Reform Now turned himself in to city police to face a burglary charge related to a foreclosure protest last week.
Louis E. Beverly broke the padlock on a
The foreclosure bill, introduced at last night's City Council meeting, is meant to give homeowners a chance to work with lenders to modify their mortgages and to encourage lenders to negotiate, city officials said.
While the Obama administration is providing financial incentives for mortgage backers to change loans for homeowners, it is going to take time for those loans to be renegotiated, Clarke said. "We need to buy time for people to be able to negotiate modified mortgages."
No representatives of the banking or mortgage industries attended the news conference yesterday morning.
John Mechem, a spokesman for the Mortgage Bankers Association in Washington, which represents 2,400 companies, said in a telephone interview that the
"I don't think that stretching out this process is the right public policy approach," Mechem said. "Lenders already [have incentives] to work with borrowers as much as possible to avoid foreclosure."
Mayoral spokesman Scott Peterson said
Robert J. Strupp, director of research and policy for the Community Law Center, who helped write the Baltimore bill, said it dovetails with the Obama proposal, which calls for a lowering of interest rates, extending the term of loans and other incentives. Details of the bill will be released next week, he said.
Knowing that it would take longer before residents must vacate would encourage lenders to avoid foreclosure, he said.
"You've got the time now. You might as well try," Strupp said. There have been few third-party sales of foreclosed properties, he said.
"Some note-holders haven't been acting logically," Strupp said. "I've seen them turn down a modification at 50 or 60 cents on the dollar" only to wind up selling the property at auction for 30 cents on the dollar.
Homeowners who pay their mortgages on time would also benefit from the bill, because preventing foreclosures and home vacancies would prevent
Henry described foreclosed homes as "starter homes of blight," left open to squatters, drug use and vandalism, and thus reducing neighborhood property values.
"It really is in everybody's best interest" to keep homes occupied, Strupp said. "The alternative is worse for everybody."
Such foreclosure legislation might help Cynthia Davis, who ACORN organizers are trying to help modify the loan on her
"They are just constantly harassing me for the payments but they're not trying to do anything to help me, even though I explained to them my situation,"
Last week's break-in by ACORN members brought national attention to foreclosures in
"We're actually trespassing. And so this is a way of civil disobedience,"
Shortly after 10 a.m. yesterday,
Anthony Guglielmi, a Baltimore police spokesman, said: "Congress and the [General] Assembly passed laws, and it's up to the Police Department to enforce them."
Stuart Katzenberg, lead organizer for ACORN's Maryland chapter, said in a statement: "We continue to take actions across the country in order to prevent unnecessary home foreclosures and stand in solidarity with our members who are resisting these foreclosure actions."
ACORN has recently increased its efforts to block foreclosures in
Hanks bought her 1,300-square-foot rowhouse in 2001 for $87,000, according to state property records. She filed for bankruptcy in July 2006, noting that she made about $25,000 a year working for a
When U.S. Bank, based in
Hanks could not be reached for comment yesterday.
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"The master class has always declared the wars; the subject class has always fought the battles. The master class has had all to gain and nothing to lose, while the subject class has had nothing to gain and everything to lose--especially their lives." Eugene Victor Debs