Bankruptcy plea halts foreclosure Developer hopes for better housing sales.

August 02, 1991|By Michelle Singletary | Michelle Singletary,Evening Sun Staff

Filing for bankruptcy may have put a developer of townhouses in north Baltimore in a better position to sell the homes.

On Tuesday, the developer, Homeland Acres Limited Partnership, filed for Chapter 11 reorganization under the U.S. Bankruptcy Code. The bankruptcy filing automatically caused a cancellation of an auction of the townhouses that had been scheduled for Wednesday.

Loyola Federal Savings and Loan Association was just a day away from auctioning off 14 unoccupied townhouses in the Villages of Homeland-East off the 400 block of Homeland Ave. In early July, Loyola Federal began foreclosure proceedings against Homeland Acres.

In its petition, Homeland Acres says it owes Loyola Federal $4.3 million. The developer did not list its assets.

Howard Rubenstein, an attorney representing the developer, says Homeland Acres' total debt is about $5 million. Homeland

Acres got into financial troubles and couldn't pay on its Loyola loan largely because of poor home sales, he says.

However, recent figures show an improvement in home sales and may signal a financial rebound for the developer, Rubenstein says.

New-home sales in the Baltimore area rose 14 percent to 5,703 in the first six months of this year, compared with 4,981 residences sold during the same period in 1990, according to a housing study by Legg Mason Realty Group.

The sale of townhouses increased 8 percent to 2,264, compared with 2,091 sold in the first six months of last year, Legg Mason reports.

Rubenstein says the original plans for the Villages at Homeland-East called for 120 townhouses. Only 54 were built, 36 of which have been sold and are occupied. Four townhouses are in the settlement process, he says.

Seeking protection from its creditors now allows the developer to market the homes through a normal sale process. The houses may have sold for less at the auction, Rubenstein says.

The two- and three-bedroom townhouses were priced from $155,000 to $170,000, Rubenstein says.

"The market was slow but now it is starting to pick up again," he says.

Rubenstein says the developer also hopes to build on the other 66 lots in the development.

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