Let's Help Baltimoreans Hold On To Their Homes

October 15, 2006|By Vincent P. Quayle

Baltimore was once known as a city of homeowners.

That largely meant working families able to afford modest rowhouses, often financed by community-based savings and loans or backed by the federal government. Today, I worry that the city is becoming known not for homeownership but for its high rate of lost homes.

Quietly but tragically, we are in the midst of a foreclosure crisis that is costing us thousands of homeowners every year and destabilizing neighborhoods across the city. This crisis has prompted the creation of the Baltimore Homeownership Preservation Coalition, made up of nonprofits, foundations, private lenders and others. It's working to educate the public and push for much-needed support and policies to help people stay in their homes.

The work of the coalition, which is modeled on a similar effort in Chicago that is showing great promise, is critical and should be a priority for our elected leaders. As an important first step, stressed city homeowners who call 311 will now be patched through to immediate help from a "homeownership counselor."

How did we get here?

Through much of its four decades, St. Ambrose Housing Aid Center worked with three groups of homeowners facing foreclosure: those who had lost a job, had a serious health problem or had divorced.

In the 1990s, that began to change as aggressive real estate firms and unethical lenders set up shop in Baltimore, offering cheap houses and easy credit. The Federal Housing Administration, which offers better terms and protections for the borrower, and as recently as five years ago underwrote more than a third of the mortgages in the city, saw its share plummet to less than 5 percent.

The result was a flood of foreclosures that continues today. While the number of foreclosure filings has declined recently, the rate of those filings remains extremely high compared with other cities such as Philadelphia and Boston.

Every day, distraught people on the verge of losing homes stream into our office. Sometimes we can work with the mortgage holder and help them save their homes; many times we can only hold their hands as the complex and fast-moving process unfolds.

Sadly, many of our clients shouldn't have bought a home in the first place.

Most are young women, single mothers who earn modest incomes, often working in service jobs. They were drawn to homeownership as a way to better their living situations, but they remain vulnerable to even small financial misfortunes.

Some were placed in homes by well-intentioned government programs. Others were lured by a relatively small group of lenders eager to make a quick buck on unsophisticated borrowers.

Things are likely to get even worse. Many Baltimore homeowners are caught in unaffordable new mortgage "products" that are difficult and costly to refinance. One setback can point these families down the road to foreclosure. Many others are stuck with adjustable-rate mortgages and interest rates that have climbed steadily.

Across the city, unless we do something, families will continue to lose their homes and much or all of their equity. It's not just about them. Entire neighborhoods suffer as foreclosures create vacant homes or neglected rentals that keep property values down.

In a new study, the Reinvestment Fund estimates that foreclosures in Baltimore have depressed the value of real estate in the city by $1.8 billion, which hurts homeowners and costs the city tax revenue.

The new homeownership preservation coalition is working to highlight the problem and seek solutions.

It could begin by passing stronger laws against predatory lending practices in Maryland and by strictly enforcing existing laws. We also need to stop selling homes to people who are not truly ready for the responsibility. That will require better counseling and screening of would-be homeowners.

This new coalition brings together many key players, including the city housing department, local foundations and national groups such as NeighborWorks America. Even CitiFinancial, a private lender, is helping to stop foreclosures because it knows that it, too, loses when a home is lost.

For so many years, Baltimore's miles and miles of brick rowhouses epitomized the city's proud record of homeownership.

I worry that unless we take action now, Baltimore will continue to be known for its rowhouses - but with foreclosure notices nailed to their doors.

Vincent P. Quayle is the executive director of the St. Ambrose Housing Aid Center in Baltimore. His e-mail is vinq@stambros.org.

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