A court order signed less than two hours before a scheduled foreclosure auction has preserved the homes of Margaret Murray and her 83-year-old mother for at least 40 days.
Murray is one of hundreds of people who obtained consumer loans at high rates through Albert S. Blank, an oft-convicted mortgage broker who declared bankruptcy in 1983 after a state investigation into his activities. Her mother, Beulah Stickles, cosigned the loan.
An auction, scheduled for 11 a.m. yesterday, was delayed by Baltimore County Circuit Court Judge J. William Hinkel until he has time to schedule a full hearing on a request to stop the sales.
Hinkel said he is particularly concerned about why the Stickles home was to be auctioned first. Alan B. Niedermayer, Murray's attorney, had worked frantically late Monday to get a judge to intervene.
Dana Whitehead, Stickles' attorney, argued that the elderly woman played no direct role in any of the litigation leading to the foreclosure and has never "had her day in court." Whitehead, who was hired Monday night, pleaded for time.
"What is troubling about this case is the apparent injustice," Hinkel said before making his decision. "There are serious questions in my mind, especially about Mrs. Stickles."
Murray has said that in 1980 she and her late husband, Leroy, were looking for $3,000 to replace the furnace in their brick Towson-area rowhouse, but ended up borrowing $14,000 through Blank. The money for the loan actually came from a neighbor of Blank's, Debra Kushner, with Blank acting as agent and keeping $4,000 as his fee, records show.
The loan, with the houses of the cosigners as collateral, was made at commercial interest rates of 24 percent per year, along with associated fees that totaled as much as 30 to 50 percent of the loan.
Murray made 39 monthly payments of $369 each on her loan, repaying more than $14,000 -- mostly in interest -- until 1983, when Blank declared bankruptcy after a state investigation.
When Blank declared bankruptcy, Murray sued both him and Kushner. Murray won a default judgment against Blank, but got back only $4,000 from his bankrupt estate, minus attorney's fees.
Murray also got a court order declaring the loan void, and she stopped making payments.
But a Baltimore County Circuit Court jury decided in 1989 that the loan for which Blank was acting as Kushner's agent was not illegal or fraudulent and that Kushner was not liable for damages.
That verdict opened the door for Kushner to get a court order April 29, 1991, making the loan valid again.
After all the years of legal wrangling and maneuvers, Murray and her mother were scheduled to have their homes sold at auction yesterday to satisfy the remainder of the debt, plus years of interest owed to Kushner.
Murray now owes about $34,000 to Kushner, including $10,545.98 in principal, $21,302.08 in interest and more than $2,500 in late charges.
The Dartmouth Avenue home of Murray's mother was to be sold first, according to Kushner's lawyer, Millard Rubenstein. He argued that the case should end with the auctions.
Blank, formerly of Pikesville, was first convicted of FHA loan fraud, a criminal offense, in 1958 and was sentenced to four months in prison. He received another four-month sentence in 1962 on a similar conviction, and in 1965 was convicted of violating probation after being convicted of conspiracy to obtain funds by false pretense.
He was found guilty of larceny in 1969 and in 1976 of making a small loan without a license. He was sentenced to five years in prison on a tax fraud conviction in 1983, and also was convicted of bankruptcy fraud and sentenced to three more years for hiding his assets with relatives after declaring bankruptcy. He is now 67 and believed to be living in Florida.
Rubenstein said Kushner was a neighbor of Blank's, who agreed to invest $14,000 with him to make the Murrays' loan.
Leroy Murray committed suicide in 1981, according to county police records. Murray's wife has said he was in despair about having fallen behind on the loan payments and by the threat of foreclosure.