Council's foreclosure bill illegal, city says

March 14, 2009|By Annie Linskey | Annie Linskey,annie.linskey@baltsun.com

A City Council bill that seeks to slow foreclosures in Baltimore violates the state and federal constitutions, according to an opinion issued yesterday by the city's law department.

The legislation, introduced by Councilwoman Mary Pat Clarke and Councilman Bill Henry, would extend the time between foreclosure and eviction from 14 days to 365 days. The lawmakers believe that the bill would provide a strong incentive for lenders to negotiate with owners rather than foreclose.

But the unfavorable legal opinion could halt momentum on the bill because, Mayor Sheila Dixon's spokesman said, it would prevent her from signing it.

FOR THE RECORD - An article in Saturday's editions misstated one possible effect of proposed Baltimore City Council legislation to extend the time between foreclosure and eviction. Should the bill pass, a title holder might not have to keep a house habitable, for example by providing heat, water and electricity. However, the title holder would still need to keep the property up to code.
THE BALTIMORE SUN REGRETS THE ERROR

"Our legal department has found that this legislation is not in accordance with state and federal law," said Scott Peterson, Dixon's spokesman.

But Clarke, a longtime veteran of the City Council, said the development will not kill her bill. She described the city's letter as "lawyers writing words to stop laws that need to be passed."

"They may not like it," she said, referring to the law office. "They many not want it." Eleven of the 14 council members have signed on to the bill. Councilman Bill Henry declined to comment.

Chief Solicitor Suzanne Sangree, in her legal opinion, said the proposed change upsets the "careful balance of the creditor and borrower's interest" codified in state law. Also, she argues that the change violates the U.S. Constitution's contract clause because "there is no apparent governmental purpose sufficient to justify" such a significant change to the contracts.

The proposed law could put those under foreclosure into "housing limbo," she says, because the title holder may not be required to keep the house up to code while waiting for the owners to be evicted.

Robert Strupp, director of research and policy with the Community Law Center, helped write the bill and disagrees with Sangree's opinion. The city government, he said, has a clear interest in avoiding foreclosures that lead to more vacant property, which would overcome constitutional issues.

Though he was not speaking for the lawmakers, he said he believes that there could be middle ground that could be handled through amendments to the legislation.

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