U.S. Senate `flipping' hearing set for Baltimore

Officials, victims to speak on rapid housing resales

March 20, 2000|By John B. O'Donnell | John B. O'Donnell,SUN STAFF

A U.S. Senate hearing on the wave of property "flipping" that has swept across Baltimore in the past four years will be held March 27 at the World Trade Center.

Sen. Barbara A. Mikulski, a Maryland Democrat, is expected to lead the hearing by the Senate subcommittee that handles the U.S. Department of Housing and Urban Development budget. Mikulski is the senior Democrat on the panel, which is headed by Sen. Christopher S. Bond, a Missouri Republican. Bond is not expected to attend.

Maryland Sen. Paul S. Sarbanes, the senior Democrat on the Banking Committee, which has legislative jurisdiction over HUD, will take part in the hearing.

More than 2,000 Baltimore houses have been bought and quickly resold in the past four years for price increases of at least 100 percent -- and sometimes as much as 1,000 percent. The deals usually involve dilapidated rowhouses. Inflated appraisals and falsified documents often are part of the transactions, which defraud buyers and mortgage lenders.

Two months ago, Mikulski criticized HUD for "subsidizing fraud." While most flips have been financed with conventional mortgages, critics say that hundreds of mortgages have been insured by the Federal Housing Administration, a HUD agency.

HUD has not been asked to send anyone to testify at the hearing, said Johanna Ramos-Boyer, Mikulski's press secretary. Mikulski will question HUD officials about flipping at a subcommittee hearing in Washington three days later, Ramos-Boyer said.

Witnesses at the Baltimore hearing will include Lynn Battaglia, U.S. attorney for Maryland, and Richard M. Mosquera, head of the FBI office in Baltimore. Battaglia is coordinating federal investigations by several agencies, including the FBI, the Postal Inspection Service and the HUD inspector general.

Victims of flipping also are scheduled to testify, along with Vincent Quayle, who heads the St. Ambrose Housing Aid Center, and Ken Strong, director of Southeast Community Organization. The two nonprofit groups are trying to combat flipping.

Three General Assembly members from Baltimore who have introduced anti-flipping legislation, Democratic Dels. Carolyn J. Krysiak, Maggie L. McIntosh and Samuel I. Rosenberg, will talk about their bills.

Another Senate panel, the Permanent Subcommittee on Investigations, is probing flipping in Baltimore and several other cities and planning a spring hearing.

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