The Baltimore City Council is considering a plan to slow the foreclosure process in hopes of stemming the tide of evictions, which city housing activists have tried to combat recently with protests and, in at least one case, allegedly illegal measures.
As the Obama administration moves on a national plan to tackle the mortgage crisis, City Council members Mary Pat Clarke and Bill Henry, both Democrats, have introduced a plan to extend the time between foreclosure and eviction from 14 days to 365 days to encourage lenders to negotiate with owners who are falling behind on loan payments.
The plan appears to have strong initial support on the council - 11 of 15 members are listed as co-sponsors. Council President Stephanie C. Rawlings-Blake and Mayor Sheila Dixon have yet to take a position.
The news conference at which Clarke and Henry announced the bill occurred about the time that an activist with the Association of Community Organizations for Reform Now turned himself in to city police to face a burglary charge related to a foreclosure protest last week.
Louis E. Beverly broke the padlock on a Southeast Baltimore home to help a woman reclaim the property she lost to a foreclosure. Local television stations broadcast the act, which ACORN activists call "homesteading." According to court records, a lender foreclosed on a Northeast Baltimore home belonging to Beverly last month.
The foreclosure bill, introduced at last night's City Council meeting, is meant to give homeowners a chance to work with lenders to modify their mortgages and to encourage lenders to negotiate, city officials said.
While the Obama administration is providing financial incentives for mortgage backers to change loans for homeowners, it is going to take time for those loans to be renegotiated, Clarke said. "We need to buy time for people to be able to negotiate modified mortgages."
No representatives of the banking or mortgage industries attended the news conference yesterday morning.
John Mechem, a spokesman for the Mortgage Bankers Association in Washington, which represents 2,400 companies, said in a telephone interview that the Baltimore bill could lengthen the housing downturn by creating "perverse incentives" to not pay mortgages if borrowers knew they had a year before they could lose their homes.
"I don't think that stretching out this process is the right public policy approach," Mechem said. "Lenders already [have incentives] to work with borrowers as much as possible to avoid foreclosure."
