A cruel lesson in home buying

Flipping: A first-time purchaser is $60,000 in debt and unable to live in the crumbling house that cost the seller $8,000 a few months earlier.

November 07, 1999|By John B. O'Donnell and Tom Pelton | John B. O'Donnell and Tom Pelton,SUN STAFF

From her kitchen window in East Baltimore, Darlene Glover watched the junkies line up in the alley from dawn until well past dark to buy crack cocaine.

Her son watched, too. He was 9 years old.

Desperate to buy a home in a safer neighborhood but lacking good credit, the 42-year-old advertising assistant became a victim of real estate flipping -- an increasingly common practice in which speculators buy shoddy homes and then rapidly sell them to naive purchasers for inflated prices.

Glover paid $60,000 -- twice the amount she thought she was paying -- for a problem-ridden house at 819 N. Kenwood Ave. that a speculator had purchased six months earlier for $8,000, according to city records.

Today she's broke, more than $60,000 in debt, and her dream of home ownership -- "a picket fence, a dog and all that" -- sits cold, dark and empty.

Now renting down the street, she finds the vacant house a painful reminder when she walks past.

"I feel embarrassed. I feel like I failed at something I wanted to do," said Glover.

"It bothers me because I want to be a homeowner and leave something for my children. Now I live in an apartment, and that house is staring me in the face every day," she said.

Like hundreds of other Baltimoreans, Glover was burned by a real estate brush fire that has swept across struggling neighborhoods in recent years, cheating first-time homeowners, lenders and aspiring real estate investors.

More than 2,000 Baltimore houses have been bought and resold for more than double their purchase price in the past three years, the State Department of Assessments and Taxation says. In two major lawsuits, lenders claim that they were duped into providing mortgages that exceeded the value of the houses being financed.

A Sun examination of more than 400 flips found that many deals included falsified documents to make buyers appear creditworthy, inflated appraisals and sham second mortgages -- all aimed at getting a loan for more than the house was worth.

Federal and state investigations are under way, and, sources say, federal investigators have gone beyond document examinations and begun to call in witnesses.

"I was scammed. I gave that lady all my trust," Glover said of Marie Hoffman, who sold her the house.

Hoffman, 52, a landlord and speculator, lives in a waterfront home with a silver Porsche 924 parked in the driveway in the Chesaco Park neighborhood of Baltimore County.

"I don't really remember the case. It was a few years ago," Hoffman said in a brief interview concerning Glover. "She's probably exaggerating. I don't want to talk to you."

Hoffman said that she didn't do anything wrong and added that she didn't know Glover had bad credit.

"The lady is not telling you the truth," Hoffman said, refusing to elaborate.

Need for unbiased help

Will Backstrom, a homeownership counselor for Neighborhood Housing Services in the Patterson Park area, said Glover has not been alone in misplacing her trust. It is not unusual for naive first-time buyers to rely on the seller in making key decisions. And that, he said, is the problem.

Glover "would never have gotten into that transaction if she had had a counselor who had no financial interest in the transaction," said Backstrom.

"The American dream is homeownership -- but not at all costs. People who are thinking of buying a house should come to see us."

Glover is a tall, dignified woman from a middle-class neighborhood in West Baltimore. She flashes a brilliant smile and warm greeting to most people she meets, despite a painful injury to her left knee that makes her limp.

She wears an "I Love Jesus" pin on her long winter coat and has a large portrait of Jesus on her wall, not far from where her now-12-year-old son loves to play Nintendo video games.

Job, evening studies

At 7: 50 a.m. weekdays, she catches bus No. 62 heading west on Madison Street to her $24,000-a-year job as an assistant marketing coordinator for the architectural and engineering firm Daniel, Mann, Johnson and Mendenhall. At night, she takes computer classes at Sojourner-Douglass College.

"Most of my life, I've struggled," said Glover, a divorced mother of two. "I wanted to go to college, because I wanted to be a child psychologist. But my family didn't have the money for it.

"There are times when I get tired of being the breadwinner, the mother and the father. But I put my trust in the Lord and keep going."

Until 1997, Glover and her two sons lived in a rented rowhouse at 1620 E. Lanvale St. in the middle of a violent drug market.

She recalls hearing the pop of gunfire as two neighborhood boys were shot to death on the corner near her home.

Audrey Wilkes, director of the community outreach program at Zion Hill Baptist Church, where Glover volunteered to help needy people, said Glover was brave to try to rescue her sons.

"Sometimes when I drove her home from church, drug dealers would literally be standing on her doorstep," Wilkes said. "She was a strong woman who wanted to do the right thing by moving to a better neighborhood."

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.