Foreclosure

The slide of thousands of homeowners into foreclosure because of the subprime mortgage mess won't stop without strong intervention from the federal government. This crisis needs to be managed because it affects so many sectors of the economy and the few remedies proposed so far haven't made a dent. President Bush's announcement last week to freeze interest rates for some homeowners provides needed relief over five years, but only for a select group, and it's voluntary. The agreement with a handful of lenders and investors targets homeowners who kept up their mortgage payments but risk default when their loans reset in 2008 and after - that's at least 500,000 borrowers.

LAS VEGAS -- In the foreclosure crisis of 2007, thousands of American families are losing their homes without ever missing a payment. They are renters in houses whose owners default on their mortgages - a large but little-noticed class of casualties. Some live in big apartments, others in houses owned by small investors who got in over their heads. There are no exact figures for how many renters have been evicted because of foreclosures, but a survey taken earlier this year by the Mortgage Bankers Association found that one in eight foreclosures was non-owner-occupied.

Unlike most hearings on the Hill, last week's meeting of the Joint Economic Committee actually got more interesting the longer it went on. While the first half-hour featured Federal Reserve Chairman Ben Bernanke offering his modest, softly downbeat but not panicked predictions about how the unfolding subprime mess would affect the broader economy, the last hour provided an opportunity to hear committee members give their own, often eccentric, diagnoses and...

Charles McCloud had never owned a home, but as he entered his late 50s he thought it was time to have the security and stability that would come from having a place of his own. So two years ago, he bought a detached two-story house on a quiet corner in the Howard Park section of West Baltimore for $225,000, borrowing the money for the closing costs and taking out two loans, one of which had an interest rate of more than 10 percent. A self-employed gospel pianist who had never made more than $35,000 a year, McCloud had just gone on disability for a variety of ailments, including congestive heart failure that often requires him to use oxygen.

Gov. Martin O'Malley announced an initiative yesterday aimed at preventing home foreclosures through credit counseling, enforcement of lending practice standards and refinancing assistance to stop what he said is a rising threat to the state's middle class. The state has received commitments for $100 million in private capital to allow about 500 households to refinance from adjustable rate loans into fixed mortgages. It will use $10 million in surplus funds from the state's mortgage insurance program to leverage another $200 million in private sector capital and will spend $1 million for foreclosure prevention activities, such as counseling for homebuyers.

Kwaku Atta Poku had seemed to find his own American dream. After emigrating from Ghana in 1992, he built a taxi business from scratch. He bought a townhouse in the quintessentially American suburb of Columbia, dutifully making each monthly mortgage payment - and even paid a bit more in some months. But he has lost the house to foreclosure and most of his business and is facing thousands of dollars of debt through no fault of his own. And his attorneys say other Maryland homeowners who refinanced in the frenzy of real estate activity during the first half of the decade could face similar legal nightmares.

Several recent Sun articles demonstrate the positive power of newspapers. Just one day after a shocking Page One story of financial abuse that left a Columbia man bankrupt and his family homeless, government officials promised in another front-page article to close loopholes in Maryland's foreclosure process that allowed this outrage to occur . The first article, "Out of townhouse, but not by choice," written by Larry Carson, described how an immigrant from...

Thomas Harman used an unorthodox way to tell uninvited visitors they were not welcome in his Columbia home: He planted a fake bomb.Yesterday, a Howard District Court judge found Harman, 39, a former Defense Department auditor and diver for the Navy, guilty of planting the phony device that caused authorities to evacuate the neighborhood in August."

A nonprofit corporation set up more than a decade ago to promote private homeownership in Baltimore has lost nearly 50 properties through loan defaults and mortgage foreclosures and has been placed on probation by state officials as the result of continuing financial problems.The Baltimore Corporation for Housing Partnerships, which just five years ago was billed as the pre-eminent player in local nonprofit housing, is struggling to survive.The group, which draws much of its funding from public sources, is in such fiscal instability that it:Is selling its 25th Street headquarters -- originally valued at almost $290,000, but now worth only $155,000 -- and will rent cheaper quarters.

A city-backed lending agency has initiated foreclosure proceedings against a former loan officer fired amid allegations of her involvement in a fraudulent consulting scheme, but her lawyer charges that the action is absurd and amounts to harassment.Baltimore Community Development Finance Corp. initiated the foreclosure suit against Deborah J. Bass this month in Baltimore Circuit Court.According to the suit, Bass, who was fired from her $46,660-a-year job in June, owes $99,893.55 for a loan on what is now a vacant lot at 5426 Clover Road.

A French bank has begun foreclosure proceedings on 1st Mariner Tower at Canton Crossing as the recession and housing slump spread deeper from Baltimore banker and developer Edwin F. Hale Sr.'s banking business to his commercial real estate activities. Paris-based Natixis SA informed Hale on Friday that the bank's commercial real estate lending arm in New York has scheduled an auction for the 17-story building and surrounding land for Oct. 21 after the default of an $84 million loan, according to a notice of sale.

WASHINGTON - - How's this for a business plan? A company buys or rents lists of recent default filings from across the country - thousands of people who have been notified by lenders that if they don't get their mortgage payments back on track, the next step will be foreclosure. Then it sends each homeowner on the list a letter with an urgent message: "We know you're having a tough time right now, but we can save your home! It's not too late! We know how to get through to your lender and work things out to save your house.

Judge finds for homeowner over foreclosure scam A Baltimore homeowner who lost his house in a foreclosure assistance scam was awarded a $63,908 judgment Monday in Baltimore County Circuit Court. Judge Lawrence Daniels ruled in favor of the homeowner, David Moennich, who had filed a breach of contract lawsuit against defendant Michael Wolf in 2006. In his lawsuit, Moennich said that in 2004 when he was facing foreclosure, he signed over the deed to his $184,000 house to Wolf, who promised to prevent foreclosure and give Moennich a chance to buy back the house.

The number of Maryland residents who face foreclosure or have missed payments on home loans rose to nearly 121,000 in the first three months of the year, with mortgage woes increasing the fastest among the less risky prime borrowers, the Mortgage Bankers Association said Thursday. Loans that were late by at least a month, including some in the foreclosure process, accounted for 11.3 percent of the more than 1 million outstanding mortgages in Maryland at the end of March, up slightly from the fourth quarter of 2008 but an increase of 67 percent from a year earlier, the MBA said in its quarterly loan delinquency survey.

A state delegate from Anne Arundel County is being sued for damages by a Pasadena woman who claims that he tricked her into signing over the deed to her home. Del. Tony McConkey, a Severna Park Republican and a real estate agent, is being sued by Teresa L. Milligan. Milligan's civil suit against McConkey alleges "foreclosure rescue fraud," a violation of a homeowner protection law that he voted for in 2005. In January 2006, Milligan said, McConkey offered to help her save her condo from foreclosure and to help her obtain a loan to make payments, according to court testimony.

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

PSC begins hearing on Constellation-EDF Constellation Energy Group has acceded to state energy regulators' investigation of whether its $4.5 billion merger with France's largest utility, Electricite de France, will have an impact on the region's regulated utility, Baltimore Gas and Electric Co. But it is asking the Public Service Commission to make an expedited decision by May 31, so as not to threaten the closing of the deal and the financial condition of...

The number of Maryland borrowers who face foreclosure or have missed mortgage payments topped 100,000 for the first time at the end of last year - a record 11.1 percent of loans in the state, the Mortgage Bankers Association said yesterday. Rising joblessness is adding to a worsening housing crisis that has sent foreclosures and delinquencies to record levels, economists said yesterday. Problems for borrowers with subprime loans are now spreading into more conventional loans. Nationally, 12 percent of borrowers were behind on their mortgage payments at the end of December.

WASHINGTON - The administration's plan for a housing rescue aids two groups of homeowners largely left out of previous efforts but will deny benefits to those who have been greedy or unwise, according to details released yesterday. President Barack Obama's plan would greatly expand mortgage relief to those who have not missed payments and those whose homes are worth less than the mortgage. What the program will not do, officials insisted, is reward the unwise or the greedy. Nor will it provide much help to those in the highest-priced areas, though it does reinstate last year's higher loan limits for refinanced or modified mortgages to $729,750 in the most expensive areas, such as Southern California.

For many Americans, the mortgage industry's feeble response to the plight of homeowners facing foreclosure has been infuriating. Mortgage servicers and lenders are often tough to get on the phone. Attempts to refinance a loan or extend mortgage payments to avert foreclosure are as discouraging. As a result, foreclosures continue to mount, families are forced to leave their homes and communities are left with an increasing toll of vacant houses. In Baltimore, the impact of the housing crisis has been felt in neighborhoods as diverse as Reservoir Hill and Belair-Edison.