Red tape stalls reclamation of abandoned houses BALTIMORE CITY

October 01, 1993|By Melody Simmons | Melody Simmons,Staff Writer

Baltimore's effort to boost its property tax rolls with an auction of 1,500 abandoned houses has spawned more headaches than homeowners, housing officials said yesterday.

Only about 350 of the 1,500 privately owned properties that were auctioned on May 12 and 18 are expected to have new owners because of a complex foreclosure process that bidders must go through to obtain their deeds, Housing Commissioner Daniel P. Henson III said.

The biggest headache has been that bidders cannot apply for mortgages until the entire foreclosure process, which can take 18 months, is completed.

The problems have sent Mayor Kurt L. Schmoke and housing officials back to the drawing board to ensure that successful bidders can more easily acquire their properties after next spring's auction.

"We'll get it right," said Clinton R. Coleman, a spokesman for Mr. Schmoke. "The mayor is committed to holding future tax sales, but has asked that the problems be ironed out."

Mr. Henson said he considers this year's unique auction a success because it generated investment interest in vacant city properties.

"It's tough, but if we can get 300 to 350 properties back on the tax rolls, I'm happy," Mr. Henson said. "We need to make it simpler and we will. The tax sale process is very cumbersome. You have to have a lot of perseverance to go through it."

At the auction, titles for some of the properties were sold for the $85 auction fee because there were no competing bids.

The city offered the properties free of liens -- including old tax liens -- and most of them were auctioned to bargain-hunting prospective homeowners and investors for between $1,000 and $10,000.

But Mr. Henson admitted that the complicated and time-consuming process to gain title to the properties discouraged many of the bidders, who this summer walked away from their potential properties.

The discouragement of the bidders may have been evident in their response to housing officials' efforts to measure the program. The officials sent 400 questionnaires to bidders in August, but only 95 were returned, said Mary Gardner, of the city Housing Department.

Under the terms of this year's auction, bidders were required to initiate foreclosure proceedings -- which cost at least $1,000 in legal and court fees -- against the property owners in Baltimore Circuit Court 60 days after the sale, Mr. Henson said. Bidders were also required to obtain a judgment against the former owners so that the city can collect delinquent property taxes.

After those legal hurdles are cleared, the deed is transferred to the new owner and renovation of the property can begin.

About the same time yesterday that officials were disclosing the problems in the auction program, about 125 bidders attended a city-sponsored seminar on foreclosure and financing at the Convention Center.

One bidder, Michael Bennett, said he was "dumping" a property on Eager Street that he bid $1,500 for because it "only had three sides" and needed extensive renovation.

Bidders John and Tania Alvez-El said they have not initiated foreclosure proceedings on a house they bid $9,000 for in the 800 block of N. Stricker St. because they cannot afford to do so.

"We need $500 before we can even start on the process and $500 is a lot now for us," said Mr. Alvez-El, who is unemployed.

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