RTC advisers get lecture on fairness, sales' impact

February 02, 1994|By David Conn | David Conn,Sun Staff Writer

With 90 percent of its work done, the Resolution Trust Corp. is winding down the painstaking job of cleaning up the worst financial mess in the nation's history.

But there are still 63 failed savings and loans, and $68 billion worth of foreclosed properties to be sold nationwide. Four of those thrifts and about $82 million worth of property are located in Maryland.

Yesterday one of the RTC's regional advisory boards came to Baltimore to hear from a diverse group of constituents bent on ensuring that the largest real estate sale in history proceeds fairly, and that everybody gets a chance at their piece of the pie.

The advisory board, chaired by Ferris, Baker Watts Inc. Senior Vice President Edwin S. Crawford, is one of six regional panels that meet four times a year in cities throughout their regions. The boards will pass the public comments along to Treasury Secretary Lloyd Bentsen, who heads the national Thrift Depositor Protection Oversight Board.

Yesterday, Mr. Crawford's panel heard from historical preservationists and natural conservationists, from low-income housing supporters and veterans' rights advocates, and from minority bankers and business development officials.

The agency has been criticized for selling properties for less than they're worth, and taking too much time to do it. But the people who testified yesterday at the Hyatt Regency were more concerned with the fairness of the process, and the effect it has on their communities.

For instance, The Harbor Bank of Maryland had believed that the RTC gave preference to minority institutions and minority neighborhoods, according to the bank's president and chief executive officer, Joseph Haskins Jr.

Harbor Bank failed last year in its effort to buy a branch of the Irvington Federal Savings Bank, Mr. Haskins said yesterday, and was further distressed to see the winner close down the branch less than two months after buying it from the RTC.

"Let's be consistent with what we do," he told the advisory panel. "If [the deciding factor] is going to be a high-bid situation, then fine, let's say that."

With no other bank branch within almost two miles of the former Irvington branch, "you really left a community empty in terms of a banking facility," Mr. Haskins said.

Emma C. Chappell, president and CEO of the minority-owned United Bank of Philadelphia, was even more direct. It is "clear that the RTC has totally disregarded the intent and mandate of the newly enacted minority preference legislation which establishes a preference in the bidding process in favor of minority acquirers desiring to bid on branches located in minority neighborhoods," she said.

"The RTC has to make up its mind once and for all if there is a preference for minorities, and if there is, someone has to define what that preference is," added Ms. Chappell, whose 5-year-old bank has grown to more than $100 million in assets by RTC-assisted purchases of failed thrifts.

The 5-year-old nationwide real estate sale also has raised concerns that the RTC is depressing the market in some of the most economically stagnant communities. That debate may continue beyond the expected 1995 deadline of the RTC's existence, but an economist at the Federal Reserve Bank of Richmond said there's no evidence that real estate values are being hurt by the RTC, at least in the Mid-Atlantic region.

"As of now, the commercial sector remains quite sluggish in areas like Baltimore," senior regional economist Ray Owens testified. "But there is not much evidence that the RTC's actions are having much impact" on property values, he said.

The region is showing some signs of life, Mr. Owens added, pointing to "a level of strength in the housing market that has been unseen since the late 1980s."

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