Tuesday, March 23, 2010

Save Renee's Baltimore Home/Finding in Foreclosure a Beginning, Not an End

Network to Stop Foreclosures and Evictions

2011 N. Charles St. Lower Level

Baltimore, Maryland 21218

Phone:  410-218-4835


For Immediate Release: March 22, 2010

Contact Person:  Sharon Black 410-218-4835






Save Renee’s Baltimore Home

Stop Bank of America from Foreclosing--

Protest the Actions of Foreclosure Attorneys Cohn, Goldberg & Deutsch.


WHEN:  Wednesday, March 23, 2010, 12 Noon


WHERE:  Offices of Cohn, Goldberg & Deutsch  

600 Baltimore St., Towson, Maryland 21204


WHO:  Renee Washington DeFreitas and supporters


Sharon Black an organizer with the Network to Stop Foreclosures and Evictions, stated,

“We will be picketing the foreclosure attorneys in Ms. DeFreitas?s case because we feel

they have been unscrupulous in rushing to foreclose on her home even before the process

of reviewing a home modification has been made.  In addition, Bank of America has not

even had a face-to-face mediation meeting as stipulated by state law.”


She continued, “What we are seeing is a pattern borne out by government statistics that

points to a silent bank bailout that is not only costly to taxpayers but has resulted in countless

foreclosures.  In Renee DeFreitas?s case we are demanding that the attorney?s at this law

firm cease the foreclosure process.”




Finding in Foreclosure a Beginning, Not an End


By John Leland


New York Times - March 22, 2010




Boston - Jane Petion lived in her home for 15 years and saw

its value rise slowly, rise rapidly and, when the housing

bubble burst, plunge at a sickening pace that left her owing

$400,000 on a house worth closer to $250,000. Last June, her

lender foreclosed on the property. The family received

notices of eviction and appeared in housing court.


Then they discovered a surprising paradox within the

nation's housing crisis: Their power to negotiate began

after foreclosure, rather than ending there.


In December Ms. Petion signed a new mortgage on her house

for $250,000, with monthly payments of less than half the

previous level. She and her husband now have a mortgage they

can afford in a neighborhood that benefits from the

stability they provide. A nonprofit lender made the deal

possible by buying the house from her original mortgage

company and selling it to her for 25 percent more than its

purchase price - a gain to hedge against future defaults.


"It was exactly what we needed to get back on our feet,"

said Ms. Petion, who works for a state agency. "We have

income. But another bank, it would have been easy to look at

our foreclosure and say, `I'm sorry, we have nothing for you now.'"


This counterintuitive solution - intervening after

foreclosure rather than before - is the brainchild of Boston

Community Capital, a nonprofit community development

financial institution, and a housing advocacy group called

City Life/Vida Urbana, working with law students and

professors at Harvard Law School.


Though the program, which started last fall, is small so

far, there is no reason it cannot be replicated around the

country, especially in areas that have had huge spikes in

housing prices, said Patricia Hanratty of Boston Community

Capital. "If what you've got is a real estate market that

went nuts and a mortgage market that went nuts, what you've

got is an opportunity."


Two years into the nation's housing meltdown, and after

hundreds of billions of dollars of federal rescue programs,

government officials and housing advocates denounce the

unwillingness of lenders to adjust the balances on homes

that are worth less than the mortgage owed on them.


Research suggests that such disparity, rather than exotic

interest rates, is the main driver of foreclosures, in

tandem with a job loss or another financial setback. The

financial industry lobbied aggressively to defeat

legislation that would empower bankruptcy judges to adjust

mortgage balances to properties' market value.


That reluctance, however, eases after foreclosure, when

lenders find themselves holding properties they need to

unload, Ms. Hanratty said.


"We found, frankly, the industry wasn't ready to do much

pre-foreclosure," she said. "But once it was either on the

cusp of foreclosure or had been taken into the bank

portfolio, banks really do not want to hold on to these

properties because they don't know how to manage them, don't

know what to do with them."


Working with borrowed money, Boston Community Capital buys

homes after foreclosure and sells or rents them to their

previous owners, providing new mortgages and counseling to

the owners, who typically have ruined credit. During the

process the families remain in their homes. Since late fall

it has completed or nearly completed deals on 50 homes, with

an additional 20 in progress, Ms. Hanratty said. The

organization is now trying to raise $50 million to expand

the program.


Steve Meacham, an organizer at City Life/Vida Urbana, is one

reason banks may be willing to sell their foreclosed

properties to Boston Community Capital. When families

receive eviction notices, his group holds demonstrations or

blockades outside the properties, calling on lenders to sell

at market value. It also connects the residents with the

Harvard Legal Aid Bureau, whose students work to pressure

lenders to sell rather than evict by prolonging eviction and

"driving up litigation costs," said Dave Grossman, the

clinic's director.


"So they're being defended legally, and we're ramping up the

pressure publicity-wise," Mr. Meacham said. "And B.C.C. came

in; they had a part that buys properties and a part that

writes mortgages. It wouldn't work without all three."


A focus of the program has been the working-class

neighborhood of Dorchester, where home prices dropped 40

percent between 2005 and 2007, compared with a 20 percent

drop statewide, according to research by the Federal Reserve

Bank of Boston. Foreclosures and delinquencies there are

more than twice the state average, the bank found.


In such neighborhoods, lenders and residents are hurt by

evictions, which often leave vacant properties that invite

crime and drive down values of neighboring houses, Ms.

Hanratty said. "So it's in the lenders' interest to get fair

market value as quickly as possible, and in the interest of

the community to have as little displacement as possible."


The program is not a solution for all lenders or distressed

homeowners. After months of post-foreclosure negotiations

with her bank, Ursula Humes, a transit police detective, is

waiting for her final 48-hour eviction notice. Her

belongings are in boxes.


Mrs. Humes owed $440,000 on her home; her lender offered to

sell it to Boston Community Capital for $260,000. But after

assessing Mrs. Hume's finances, the nonprofit asked for a

lower selling price, and the lender refused.


On a recent evening, Mr. Grossman of the Harvard law clinic

counseled Mrs. Humes on her options. "This is a case that

doesn't have a happy ending," Mr. Grossman said.


Mrs. Humes said, "I depleted my retirement account and

everything I owned, but I'm still going to lose it."


Many commercial lenders, similarly, would shy away from such

a program because it involves writing mortgages for

borrowers who have already defaulted once - a high risk for

a small reward.


For other homeowners, though, the program is a rescue at the

last possible second. Roberto Velasquez, a building

contractor, lost his home to foreclosure last November,

owing the lender $550,000. After extensive wrangling, during

which his family stayed in the house, he bought it again in

March for $280,000, a price he can afford.


On the night after he closed, he joined other members of

City Life/Vida Urbana at a foreclosed four-unit building in

Dorchester from which most of the tenants had been evicted.

A group of artists projected videos on sheets in the

windows, showing silhouettes of families re-enacting their

last 72 hours before eviction. Garbage filled one of the

units. Mr. Velasquez said it hurt to stand amid such loss,

but he was jubilant at his own perseverance.


"We've been fighting for so long," he said, "and we win,

because we're still in the house."


A version of this article appeared in print on March 22,

2010, on page A12 of the New York edition.




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